• 455 days Will The ECB Continue To Hike Rates?
  • 455 days Forbes: Aramco Remains Largest Company In The Middle East
  • 457 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 857 days Could Crypto Overtake Traditional Investment?
  • 861 days Americans Still Quitting Jobs At Record Pace
  • 863 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 866 days Is The Dollar Too Strong?
  • 867 days Big Tech Disappoints Investors on Earnings Calls
  • 868 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 869 days China Is Quietly Trying To Distance Itself From Russia
  • 870 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 873 days Crypto Investors Won Big In 2021
  • 874 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 875 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 877 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 877 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 880 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 881 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 881 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 883 days Are NFTs About To Take Over Gaming?
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

  1. Home
  2. Markets
  3. Other

Gold Market Update

originally published March 5th, 2012

Gold reversed violently to the downside last week, an event which has serious implications. It had been doing well up to that point and we did not see this reversal coming, so this is going to be "wise after the event" update - still it is considered to be better to be wise after the event than not wise at all, particularly if our interpretation of the meaning of this development proves to be correct.

On its 15-month chart we can see that gold reversed after making a close approach to its highs of last November which formed beneath the resistance at the lower boundary of the top area of last August - September. Unable to break above these highs, it caved in last week. The magnitude of the drop on Wednesday and the high volume that accompanied it are a sign of an important reversal, so we can expect to see gold heading lower in coming days and weeks. While it is true that moving averages are in favorable alignment, this is unlikely to help much, and gold will not be "out of the woods" until it can break above the strong resistance towards and at $1800. The strong support shown on the chart at about $1550 must hold - if it fails gold will enter a bearmarket. At present gold can be considered to be rangebound.

Gold 15 Month Chart

On the 3-year chart we can see the recent rangebound action of gold in the context of the long, steady uptrend that preceded it. Despite the positive alignment of its moving averages, action last week suggests that it is likely to head lower towards the key support over the short to medium-term, especially given that silver has just reversed after arriving at a major trendline. A clear break above $1800 will turn the picture much more positive.

Gold 3 Year Chart

The latest chart for the Gold Miners Bullish Percent Index shows that investors are now a lot more bullish towards gold stocks than they were at the turn of the year, making a reaction here more likely.

$BPGDM (God Miners Bullish Percent Index (EOD)) INDX

 

Back to homepage

Leave a comment

Leave a comment