Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Are Technicals Pointing to New Gold Price Rally?

Commodities / Gold and Silver 2021 May 01, 2021 - 11:09 AM GMT

By: MoneyMetals

Commodities

Although we tend to focus more on the fundamentals here at Money Metals, the technical indicators can offer important insights. Such as right now.

Many traders, investors, and momentum players will closely examine the market trend to determine if and when to enter or exit the market.

A market with a strong technical foundation can launch to dizzying heights, while a market displaying weak technicals will have a tough time putting together any sustainable upside.

The gold market has been primarily range bound for the last two months. The $1700 and $1800 levels have acted as support and resistance. Medium term, though, gold has been in a downtrend since its $2,100 high last August.



18 Month gold pricesThe chart has provided some clues, however, that suggest the bulls are finally regaining traction and the market is potentially gearing up for a breakout above $1800 in the coming weeks.

Two distinct clues stand out currently that could point to higher prices…

First, the market has been making higher swing highs with higher lows. Second, the volume on any pullbacks has been very light, whereas the volume on upside has been stronger.

The market, if it does in fact stage a breakout above the $1800 area, it will have carved out a short-term double bottom. This type of chart pattern is reliable and points to upside gains at least the height of the pattern from bottom to swing high, i.e., a $100 rally.

Against the backdrop of improving technicals in the gold market, the yellow metal also enjoys support from fundamental factors such as increasing inflation fears, easy monetary policies, and staggering federal deficits.

The Federal Reserve is meeting again this week and will announce its decision on policy and hold a press conference today to spin its message out to the financial markets.

No changes are expected from the central bank, but market participants will pay very close attention to the bank’s commentary looking for any clues about the path of policy going forward.

In addition to the threat of rising inflation and easy monetary policies, the gold market may also benefit from a stock market reversal assuming one develops.

Stocks have continued their ascent despite numerous issues in the way and many analysts seem to be of the opinion that a top could be near or at hand.

Given the rapid and extended rise in equities, a significant decline could take place that has the potential to rapidly drag equity prices sharply lower.

A stock market decline of 10, 20, even 30+ percent could pave the way for sharply higher gold and metals as investors seek out perceived safe havens to put capital to work.

The high and rising levels of U.S. debt should also add fuel to the fire.

The U.S. debt is now at a record, and rising-debt to-GDP ratios could signal trouble on the horizon. If a mass exodus from U.S. debt does take place, borrowing costs could skyrocket overnight and the effects on the domestic economy could be crippling.

The threat of massive inflation exists, and such rising price pressures could send the price of gold running to fresh all-time highs above $2,100. Such a situation could even cause the Federal Reserve to simply print even more money and monetize debt to force down long-term rates, exacerbating the problem.

Whatever the case may be, the current technical outlook for gold is looking better than it has in many months.

Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2021 Stefan Gleason - 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.


© 2005-2022 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