• 92 days Could Crypto Overtake Traditional Investment?
  • 97 days Americans Still Quitting Jobs At Record Pace
  • 99 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 102 days Is The Dollar Too Strong?
  • 102 days Big Tech Disappoints Investors on Earnings Calls
  • 103 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 105 days China Is Quietly Trying To Distance Itself From Russia
  • 105 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 109 days Crypto Investors Won Big In 2021
  • 109 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 110 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 112 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 113 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 116 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 117 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 117 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 119 days Are NFTs About To Take Over Gaming?
  • 120 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 123 days What’s Causing Inflation In The United States?
  • 124 days Intel Joins Russian Exodus as Chip Shortage Digs In
Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

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 Just Needs More Time

The Gold market appears to be in reverse gear at present. It's at fresh 6 week lows with a 2nd Daily Cycle that continues to wind lower, and is showing nothing that's at all positive. Gold is trading very lethargically, and is uninteresting from most perspectives.

Assets move higher or lower in direct relation to the sentiment of traders and investors. And sentiment swings like a pendulum, from bullish to bearish and then back again. Sentiment is the primary driver of demand, with greater buyer engagement - both in numbers and enthusiasm - required to drive prices higher. Unfortunately for Gold bulls, it appears that the sentiment pendulum has already peaked, and is heading back toward bearish lows. We see this clearly in the COT reports, with traders continuing to shift from net Long to net Short positions. The report's actual survey data confirms that sentiment for the current Investor Cycle has topped, and is now in decline.

Ultimately, price action rules. In this case, with the current Daily Cycle having declined for 22 days (and counting), Gold's price shows clear confirmation of an Investor Cycle decline. Bullish Cycles generally contain declines of no more than 10 days.

Headlines don't always drive asset prices, but if Gold were inclined to move higher, last week's sound bites around both a potential Greek exit and a breakdown of the Ukraine ceasefire offered plenty of fuel for it. Instead, Gold continued moving lower without a hint of strength. Given the geopolitical backdrop, Gold's lack of upside movement speaks volumes about its underlying demand.

$GOLD Gold - Spot Price (EOD) CME: Gold Daily Cycle
Larger Image

On the Investor Cycle timeframe, the current 4 week decline also creates problems for bulls. There is no way to sugar coat it: the action has been downright bearish. In my opinion the evidence clearly shows that the current Investor Cycle has topped and is on the way to a Investor Cycle Low.

From a review of past Cycles, especially those of the past 4 years, it's clear that the week 11 high is almost certainly the top of the current Investor Cycle. Having price fall through the weekly trend-line is one issue, but the firm close below the 10 week moving average creates even more of a concern. In addition, an Investor Cycle in an uptrend rarely sees price spend an entire week below the 10 wma, but that's what happened to Gold this week.

$GOLD Gold - Spot Price (EOD) CME
Larger Image

With Gold now 15 weeks into the current Investor Cycle and with a 10 wma that has turned lower, it's clear that the current Investor Cycle is in decline and on its way to a trough. At this point, the evidence is conclusive, so only an outlying Cycle development would shift our outlook. Traders need to be aware that an oversold Daily Cycle rally should come this week, but that is an opportunity to sell on strength and capture the larger move lower over the coming months.

 


The Financial Tap publishes two member reports per week, a weekly premium report and a midweek market update report. The reports cover the movements and trading opportunities of the Gold, S&P, Oil, $USD, US Bond's, and Natural Gas Cycles. Along with these reports, members enjoy access to two different portfolios and trade alerts. Both portfolios trade on varying time-frames (from days, weeks, to months), there is a portfolio to suit all member preferences.

You're just 1 minute away from profitable trades! please visit: http://thefinancialtap.com/landing/try#

 

Back to homepage

Leave a comment

Leave a comment