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
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
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

Gold Needs to Hold Important Support

Commodities / Gold & Silver 2009 Oct 04, 2009 - 03:31 PM GMT

By: Douglas_V._Gnazzo

Commodities

Best Financial Markets Analysis ArticleGold - Gold had a good week, gaining $12.10 (+1.22%) to close at $1003.00 for a weekly gain of +1.22%. So far this year gold is up 13.7%.

The daily chart below shows GLD testing its recent breakout above the June high, as marked by the dotted horizontal support line. Gold has already tested this level previously and bounced higher.


This support area needs to hold or a move lower to test the August high is likely. Just below the August high is the diagonal trend line that forms the top of the symmetrical triangle GLD has constructed since March.

MACD remains under a negative crossover, which has widened slightly; however, the histograms are slowly receding – so the signals are mixed. Stochastics are moving higher.

The weight of the evidence slightly favors the bulls. The key is that price holds horizontal support.

The weekly chart has the inverse head & shoulders formation still in play. The series of higher lows following the right shoulder is impressive.

Note that MACD has been trending sideways since April, which is when the right shoulder was formed. There have been a couple of negative crossovers followed by positive crossovers, yet the overall trend for MACD is sideways.

Presently, MACD looks like it is curling over and getting ready to make a negative crossover. The histograms are receding back towards zero, suggesting the same. Stochastics have already made a negative crossover, but they have not yet fallen below the 80 overbought level.

The weekly chart suggests further downside action may be coming. Price is the final arbiter, however, so watch and see if GLD holds support. That is the first objective. If support holds, higher prices will follow.

If support does not hold, then a test of the lower diagonal trend line is likely. This is around 94, which is just above the two higher lows marked on the chart following the right shoulder.

The dollar warrants close attention. If a short covering rally occurs, it could be violent, as there are many players presently short.

If (?) this were to occur it would put a strong head wind in the face of gold; and could precipitate a test of the right shoulder.


Gold Stocks

Gold stocks, as represented by the GDX, were down slightly for the week, giving back 0.31 (-0.72%) to close at 42.76.

Price has broken below its horizontal trend line connecting back to the June high. What was support has now turned into resistance and the GDX has tested the resistance zone and failed thus far.

Volume increased on the decline. MACD remains under a negative crossover, which is widening. It appears that a test of the August high (yellow band) may be forthcoming.

Up next is the monthly GDX chart. It shows a positive MACD crossover, which is a bullish long term signal.  Notice, however, that price is near the same level it was back in 2006.

I have mentioned this before as a sign that overall the gold stocks have been underperforming physical gold; although at certain times they outperform, which is the time to be holding them.

At some point they are going to be excellent performers again – I just don’t know when. They are subject to overall stock market risk, which is considerable at this time. Thus I remain cautious.

The above excerpt is a small sampling from the latest full-length market wrap report, available only at the Honest Money Gold & Silver Report website. All major markets are covered with the emphasis on the precious metals. Stop by and check out the myriad forms of information available, not only on investing, but on the history of gold and silver money as mandated by the U.S. Constitution.

Good luck. Good trading. Good health, and that’s a wrap.

Come visit our website: Honest Money Gold & Silver Report
New Audio-Book Now Available - Honest Money  

Douglas V. Gnazzo
Honest Money Gold & Silver Report

About the author: Douglas V. Gnazzo writes for numerous websites and his work appears both here and abroad. Mr. Gnazzo is a listed scholar for the Foundation for the Advancement of Monetary Education (FAME).

Disclaimer: The contents of this article represent the opinions of Douglas V. Gnazzo. Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Douglas V. Gnazzo is not a registered investment advisor. Information and analysis above are derived from sources and using methods believed to be reliable, but Douglas. V. Gnazzo cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions. This article may contain information that is confidential and/or protected by law. The purpose of this article is intended to be used as an educational discussion of the issues involved. Douglas V. Gnazzo is not a lawyer or a legal scholar. Information and analysis derived from the quoted sources are believed to be reliable and are offered in good faith. Only a highly trained and certified and registered legal professional should be regarded as an authority on the issues involved; and all those seeking such an authoritative opinion should do their own due diligence and seek out the advice of a legal professional. Lastly Douglas V. Gnazzo believes that The United States of America is the greatest country on Earth, but that it can yet become greater. This article is written to help facilitate that greater becoming. God Bless America.

Douglas V. Gnazzo © 2009 All Rights Reserved


© 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