• 6 hours Rhodium Climbs Reaches Record Highs
  • 23 hours Tesla Tumbles After Battery Day Fails To Impress
  • 1 day Three Energy ETFs To Watch This Decade
  • 2 days What To Do With $2 Trillion In Suspicious Bank Transactions?
  • 3 days How The Stock Market Predicts Electoral Victory
  • 3 days Tesla's "Battery Day" Could Deal A Blow To Cobalt Miners
  • 4 days New TikTok Deal Hopes To Bypass National Security Concerns
  • 4 days Where Will Gold Go From Here?
  • 5 days COVID-19 Is Fueling A Pastic Waste Crisis
  • 5 days Gold Output Set To Decline
  • 6 days Uber And Lyft Look To Go Electric
  • 7 days COVID-19 Is Crushing Palladium Demand
  • 8 days This ‘Once-Boring’ Tech Company Is Now Super Hot
  • 9 days Will Air-Based Protein Be Our Future Food?
  • 9 days Google Pledges To Go Carbon-Free By 2030
  • 10 days A New Twist In The TikTok Saga
  • 10 days Gold Inches Closer To $2,000
  • 11 days Delivery Drones Are Coming Sooner Than You Think
  • 11 days Traders See More Volatility Ahead For Commodities
  • 12 days How COVID-19 Is Transforming The World's Sovereign Wealth Funds
Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

  1. Home
  2. Markets
  3. Other

Gold: Connect the Dots

Deciding when to buy and when to sell (in any market) is a difficult process. Since there are no guarantees, the best one can do is to gather bits and pieces of information that lead to a logical conclusion. In other words, try to connect the dots!

DOT I

We can see from this chart that our long consolidation dating back to December of 2004 has centered around the previous high achieved earlier in the year. The RSI and MACD are showing a moderate oversold condition - - while we may fall further, a turn to the upside is expected sooner rather than later.

DOT II

Switching to a weekly perspective cuts out some of the noise we see in the daily chart technical indicators. Here the intermediate tops and bottoms are more clearly defined. Also take note that each correction has bottomed at or near the previous top. We can also see that 3 of the 4 major highs shown here occurred in the November-January time period. This means we want to be positioned for a move before we hit that critical period. However, most people I know do not trade futures - - so while now may be a good time to load up on physical bullion, most gold bugs can't "make money" on swings in the price of gold... they depend on the gold stocks. This leads us to our third dot, which centers around the HUI.

DOT III

Here we compare moves in PM stocks to moves in the price of gold itself. The red vertical lines indicate a new high in the price of gold. This phenomenon clearly has been shrugged off by the gold stocks every time it occurs. However, the blue vertical lines indicate the reactionary confirmation low made by the POG. Apparently, the stocks don't move until gold "proves" it's not going to fall back under a previous "maginot line" of resistance. Had we bought on this signal the last two times it occurred, and sold when gold made a new high, we would have been in perfect position for all the major twists of this bull market in gold. Keep in mind that markets of any type throughout history are famous for not doing what you think they should do - - as I'm sure you've heard before, "The market can remain irrational longer than you can remain solvent."

Those are the dots. I've connected them in the manner I believe they fit together best. Buying or selling....that part is up to you.

Back to homepage

Leave a comment

Leave a comment