Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

No Gold Summer Doldrums, End of Action for Mining Stocks?

Commodities / Gold and Silver 2011 Sep 03, 2011 - 03:13 PM GMT

By: Przemyslaw_Radomski


Best Financial Markets Analysis ArticleThis will be an August to remember – no summer “dulldrums” this year. Gold has risen roughly 12% this month and nearly 30% year to date. Gold prices had a trading range of more than $300 in August.

Stocks are a different story. Wall Street ended the month with losses that came with an extended rout the first three weeks, with the current batch of gains only denting the damage. Since the start of July the FTSE 100 has lost 10.6%. The S&P is down 8.2%. The NIKKEI 225 has lost 8.8%, while the German DAX has plunged 22.6%. By contrast, gold prices have gained nearly 23% over the same period.

September is supposed to be the worst month on the calendar for stocks with losses averaging up to 1.2%, which, after a lousy August, does not bode well. By contrast, physical demand is likely to be strong for gold in the coming months due to expected strong buying from India, the world's largest gold market as the country begins its annual festival season.

Tuesday the price of gold price leapt 2.2% in less than an hour hitting $1832 per ounce - still 4.2% off last week's all-time high of $1,917.90. Gold rose on speculation that the Federal Reserve will further ease monetary policy to stimulate the economy. Minutes of the Fed meeting showed that a few members of the rate-setting committee “felt that recent economic developments justified a more substantial move” beyond the central bank’s Aug. 9 pledge to keep borrowing costs at a record low until mid-2013. This bias on the part of some Fed officials toward providing more easing was due to deep concern about the long-term unemployment.

Chicago Fed President Charles Evans said Tuesday in an interview that “We need to do more.” Just that statement was worth $38.20 in the price of gold. This is after Fed Chairman Ben S. Bernanke refrained from announcing additional stimulus last Friday at a meeting of central bankers in Jackson Hole, Wyoming.

Wednesday gold futures fluctuated between small gains and losses keeping above the psychologically important $1,800-an-ounce mark.

Gold has risen roughly 12% so far this month and nearly 30% year to date. At its record high on Aug. 23, the spot price of gold was up 18% from the beginning of August and 35% year to date. It dropped 11% to just over $1,700 within two days of hitting the high. This was no big surprise if you had considered what we had written on August 16th in our essay on top in gold:

(…) the overbought situation comes at a time when price levels are at or near very strong long-term resistance lines. It does appear that we are quite close to an important top (…) and long positions in gold at this point seem very risky at least for the short term.

Although plunges can be scary, it gives one perspective when you consider that the correction took gold no lower than it had been trading just two weeks earlier.

If your curiosity is aroused by what might happen during the following week, we’ll begin this week's technical part with the analysis of the XAU Index. We will start with the long-term chart (charts courtesy by

In this week’s very long-term XAU Gold and Silver Index chart, we have a situation which is quite mixed once again. The sideways price movement has been seen since late 2010 and attempts to move above the level of previous highs continue to be seen. A powerful rally would likely follow if this move is seen but our skepticism continues until such a breakout is seen.

In this week’s long-term HUI Index chart, we did not see the plunge which would be in perfect tune with the symmetric pattern. However, this symmetry does not have to be perfect. The single spike high did not appear as in the past, but if gold stocks decline from here, the price action will still be similar to the previous decline. Based on this chart alone, the situation is bearish as no breakout has been seen and the basic symmetric pattern is still in place to some extent.

In this week’s short-term GDX ETF chart, we actually see some bullish price pattern in the form of a reverse head-and-shoulders formation. If this pattern is completed, it will likely lead to much higher prices but we would need to see gold’s stocks move above previous highs and verify the breakout.

Based on this chart alone, a rally appears likely due to the recent trading pattern. However, there is also a possibility that we are seeing a double top right now. We are truly at a crossroads and the breakout or breakdown which is yet to come will likely determine a much bigger move in the same direction.

Summing up, the situation for mining stocks is mixed overall. The recent move to previous highs is bullish since the underlying metals did not follow or lead the mining stocks. A truly bullish situation would be a move above previous highs here and a verification of this breakout. This has not yet been seen, so the situation remains mixed.

To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, we urge you to sign up for our free e-mail list. Gold & Silver Investors should definitely join us today and additionally get free, 7-day access to the Premium Sections on our website, including valuable tools and unique charts. It's free and you may unsubscribe at any time.

Thank you for reading. Have a great and profitable week!

P. Radomski
Sunshine Profits

    Interested in increasing your profits in the PM sector? Want to know which stocks to buy? Would you like to improve your risk/reward ratio?

    Sunshine Profits provides professional support for precious metals Investors and Traders.

    Apart from weekly Premium Updates and quick Market Alerts, members of the Sunshine Profits’ Premium Service gain access to Charts, Tools and Key Principles sections. Click the following link to find out how many benefits this means to you. Naturally, you may browse the sample version and easily sing-up for a free trial to see if the Premium Service meets your expectations.

    All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mr. Radomski and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above belong to Mr. Radomski or respective associates and are neither an offer nor a recommendation to purchase or sell securities. Mr. Radomski is not a Registered Securities Advisor. Mr. Radomski does not recommend services, products, business or investment in any company mentioned in any of his essays or reports. Materials published above have been prepared for your private use and their sole purpose is to educate readers about various investments.

    By reading Mr. Radomski's essays or reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these essays or reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise that you consult a certified investment advisor and we encourage you to do your own research before making any investment decision. Mr. Radomski, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Przemyslaw Radomski Archive

© 2005-2019 - 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