• 348 days Will The ECB Continue To Hike Rates?
  • 348 days Forbes: Aramco Remains Largest Company In The Middle East
  • 350 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 750 days Could Crypto Overtake Traditional Investment?
  • 754 days Americans Still Quitting Jobs At Record Pace
  • 756 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 759 days Is The Dollar Too Strong?
  • 760 days Big Tech Disappoints Investors on Earnings Calls
  • 761 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 762 days China Is Quietly Trying To Distance Itself From Russia
  • 763 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 766 days Crypto Investors Won Big In 2021
  • 767 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 768 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 770 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 770 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 773 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 774 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 774 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 776 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

Gold and Silver

Update 22nd october 2012


1. Personal Note

As I am writing these updates free of charge I'd like to ask you one favor: Could you help me raising my subscriber base by forwarding this newsletter to all your friends and people who might be interested in, please? Here is the link. THANK YOU!


2. Update

Gold 4-Year Chart

Gold Short-Term Chart


Arguments for lower prices:

  • 3rd attempt (within 11 months) to take out heavy resistance around US$1,790.00-1,800.00 failed and Gold clearly broke down from bearish wedge
  • Gold weekly embedded slow stochastic reading now lost (could be regained again only within this week if Gold manages to create a bounce from oversold levels. Otherwise it will take more than a month to get embedded readings again despite any price action. In this case indicator will become overbought on the weekly chart, this would imply lower prices or sideways action in gold in the coming weeks ...)
  • Silver's slow stochastic close to embedding (both lines below 20) on the downside in the daily chart
  • Short-term recovery after Friday's sell off so far very muted
  • COT Data still very bearish despite some little short-covering from the commercials
  • Gold stocks did not yet reach 38,2% and 50MA
  • Despite dollar weakness gold & silver performed very weak
  • October historically worst month for gold (Gold usually hits a low just as the Hindu festival of lights "Diwali" starts which is 13th of November this year)
  • VIX after three months of sideways action now trying to move up from long-term lows. Higher volatility normally means correction in the stock market (Google & Apple already down sharply).


Arguments for higher prices:

  • Gold & silver now oversold
  • 50-MA (US$1,720.02) offers support
  • 38,2% (US$1,719.40) offers support
  • Short-term momentum Indicators (1h chart) did not confirm lower lows (bullish divergence)
  • Gold stocks outperforming gold last week
  • Monthly Bollinger Band offers more room to the upside. Currently US$1,837.48
  • New uptrend in precious metals since august 2012 that should carry gold up to US$1,880.00-1,920.00 until spring 2013.
  • November very bullish seasonals. Seasonality until spring very promising.
  • Never fight the FED. Unlimited QE -> money printing all over the world will push asset prices in all sectors higher...
  • FED might want to keep the markets up until presidential election


Conclusion:

  • Gold reached 1st strong support around US$1,720.00 and is statistically "moderate oversold". A brief bounce up to around US$1.745,00 (downtrend channel) followed by sideways action around 50MA (US$1,720.02) in the next couple of days should be expected.
  • So far recovery has been very muted and judging from past experience this is not the type of final sell off that often ends a correction in gold.
  • Since COT Data still looks pretty bad I expect the correction to be continued. Downside target will be 200-MA (US$1,662.39) and 61,8% retracement of the recent rally (US$1,670.78).
  • After this correction I expect year-end rally to start sometime within the first two weeks of November


Long-term:

  • Nothing has changed
  • Precious Metals bull market continues and is moving step by step closer to the final parabolic phase (could start in 2013 & last for 2-3 years or maybe later)
  • Price target DowJones/Gold Ratio ca. 1:1
  • Price target Gold/Silver Ratio ca. 10:1

 

Back to homepage

Leave a comment

Leave a comment