Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Stock Market Pause Should Extend - 21st April 19
Why Gold Has Been the Second Best Asset Class for the Last 20 Years - 21st April 19
Could Taxing the Rich Solve Income Inequality? - 21st April 19
Stock Market Euphoria Stunts Gold - 20th April 19
Is Political Partisanship Killing America? - 20th April 19
Trump - They Were All Lying - 20th April 19
The Global Economy Looks Disturbingly Like Japan Before Its “Lost Decade” - 19th April 19
Growing Bird of Paradise Strelitzia Plants, Pruning and Flower Guide Over 4 Years - 19th April 19
S&P 500’s Downward Reversal or Just Profit-Taking Action? - 18th April 19
US Stock Markets Setting Up For Increased Volatility - 18th April 19
Intel Corporation (INTC) Bullish Structure Favors More Upside - 18th April 19
Low New Zealand Inflation Rate Increases Chance of a Rate Cut - 18th April 19
Online Grocery Shopping Will Go Mainstream as Soon as This Year - 17th April 19
America Dancing On The Crumbling Precipice - 17th April 19
Watch The Financial Sector For The Next Stock Market Topping Pattern - 17th April 19
How Central Bank Gold Buying is Undermining the US Dollar - 17th April 19
Income-Generating Business - 17th April 19
INSOMNIA 64 Birmingham NEC Car Parking Info - 17th April 19
Trump May Regret His Fed Takeover Attempt - 16th April 19
Downside Risk in Gold & Gold Stocks - 16th April 19
Stock Market Melt-Up or Roll Over?…A Look At Two Scenarios - 16th April 19
Is the Stock Market Making a Head and Shoulders Topping Pattern? - 16th April 19
Will Powell’s Dovish Turn Support Gold? - 15th April 19
If History Is Any Indication, Stocks Should Rally Until the Fall of 2020 - 15th April 19
Stocks Get Closer to Last Year’s Record High - 15th April 19
Oil Price May Be Setup For A Move Back to $50 - 15th April 19
Stock Market Ready For A Pause! - 15th April 19
Shopping for Bargain Souvenirs in Fethiye Tuesday Market - Turkey Holidays 2019 - 15th April 19
From US-Sino Talks to New Trade Wars, Weakening Global Economic Prospects - 14th April 19
Stock Market Indexes Race For The New All-Time High - 14th April 19
Why Gold Price Will “Just Explode… in the Blink of an Eye” - 14th April 19

Market Oracle FREE Newsletter

Top 10 AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Gold Breaking Below This Point Could Be Fatal

Commodities / Gold and Silver 2018 Jul 12, 2018 - 12:50 PM GMT

By: Harry_Dent

Commodities Shortly after gold fell to $1,046 in December 2015, I called for a bear market rally that ranged from $1,375 to $1,428.

That low mark of $1,375 has been tested three times since without being able to break above.

That’s not a good sign…

Gold has been steadily down since the third test on April 11th.


I first warned our Boom & Bust subscribers on June 4th that a break below the late 2016 rising trendline would likely trigger a further fall.

Then again on June 15th as the break was occurring, saying that it “may be the last chance to sell gold for any kind of decent profits.”



Gold went straight down from there.

After giving a sell signal at around $1,290, it has now tested a second bottom trendline that extends back a year earlier from the major low of $1,046 on December 11, 2015. Yesterday’s low should be the final support, which will be a “make or break” point for gold.

If it cannot hold here…

If it breaks significantly below Monday’s low of $1,240…

Then the next real support is back at that $1,046 to $1,050 range.

After that, it’ll drop to the lows seen in late 2008 around $700.

Silver is at a similar critical level. It was just under $16 on Monday, and has been tested several times since late 2015.

Gold is oversold short-term, and is bouncing a bit this (Tuesday) morning, as expected.

This bounce could easily go back to $1,270 or so.

But a clear break of this rising bottom trendline ahead would be the last stand for gold.

Mark Hulbert, a financial analyst, measures long-term sentiment in many indices. He doesn’t see gold at levels that invite a major bottom and rally ahead. His sentiment indicator for gold is at -13% on Monday against -30%, which is more ideal for major bottoms.

He says gold bugs are only moderately bearish, but that’s not bearish enough.

The dollar has also been rallying from its lows of 88, and is trying to break above the resistance at 95.

A break like that would be further bearish for gold. Gold trades in dollars and a rising dollar means falling gold prices. The rise in short- and long-term interest rates prompted by the Fed don’t agree with gold either since it yields no interest to compete.

And that looks to continue for many months ahead.

Now, if gold were to mount a strong rally and break above $1,375, then that could actually be a bullish move that projects it towards $1,650 or so.

This is what bitcoin is doing after testing the critical $5,800 to $6,000 levels that I recently warned about.

But, again, that doesn’t look likely.

So, how much do you love your gold?

Hopefully not enough to be like the gold bugs. They’ve so much emotional and ideological attachment…

Despite heroic attempts to stimulate growth and inflation, we’re in a deflationary era until at least 2020, and likely into 2023…

This isn’t favorable for gold since it hasn’t fully deflated from its bubble that peaked in September 2011.

Gold’s bubble deflation requires the minimum of a $700 low – the level seen in the 2008 crash.

It’s bubble action (bubble origin) started in 2005 at $450. That would be the ultimate deflation and low for this bubble.

If that happens, then load up the truck and get ready for the next long commodity and inflation cycle. One where gold could see something like the $5,000 that gold bugs are forecasting – it’s just that they will be dead by then!

If you make the rational decision and sell on the break, you can buy back if it does happen to break convincingly above $1,375 without missing too much.

But again, that’s the unlikely scenario of chance here with greater downside than upside near term…

Harry

http://economyandmarkets.com

Follow me on Twitter @HarryDentjr

Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.

Copyright © 2018 Harry Dent- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Harry Dent Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules