• 17 hours Biden Will Be A Boon For Solar Stocks
  • 3 days The Gold Rally Has Finally Run Out Of Steam
  • 3 days Citibank Analyst Predicts $300k Bitcoin By End Of 2021
  • 6 days Bitcoin Lives Up To Its Safe Haven Status In A Big Way
  • 6 days 14 Million People Will Lose Unemployment Benefits On December 31st
  • 8 days Why 12 Million American Millionaires Isn’t Good News
  • 9 days Big Oil Is Paying The Price For Investing In Renewables
  • 10 days The Banking Industry’s $35 Billion Gravy Train Could Disappear
  • 11 days Did Amazon Just Democratize Prescription Drugs?
  • 12 days The Private Space Race Just Got Very Real
  • 14 days Short Sellers Are Willing Big In This Turbulent Market
  • 15 days SpaceX Gets Go-Ahead To Send Humans Into Space
  • 16 days Saudi Arabia Lost $27 Billion In Oil Crash
  • 17 days China’s Big Tech Takes A Hit As Regulators Crack Down
  • 18 days Black Friday Could Be Retailers’ Only Hope
  • 19 days Why You Should Not Dump Your Stay At Home Stocks Just Yet
  • 20 days The Real Reason Why Uber And Lyft Stocks Have Soared Nearly 50%
  • 22 days Bitcoin Heads Towards $16,000 And No One’s Cashing In
  • 23 days Elon Musk’s $250 Tesla Tequila Is Already Sold Out
  • 24 days Will The San Francisco Wealth Tax Spark An Exodus Of The Rich?
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

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 Update

Gold has been on a roll these past few weeks as it has rocketed from the lows of $1046 on December 3rd to a high of $1200 this past day. That is an advance of 17% and doubtless many are wondering if this is the start of a new multi-year bull market for gold (and by consequence, silver)?

As things stand, gold may be about to encounter some headwinds. First, we look at the channel that gold has been descending gently down since August 2013. As you can see, gold has touched the top channel line three times in that period only to fall back to the lower line of the channel.

Weekly Gold Chart

Obviously, this ping pong cannot continue forever. Gold is either going to break through the top line or drop through the bottom line. So, the odds are that gold will touch the upper line at about $1212 only to fall back. But, will this mean gold will automatically drop back to the bottom channel line for a fifth time somewhere in the region of $1000?

To put this in perspective, how far have the previous bull runs within this weekly channel ran? These are tabulated below and should be compared to the current run up of 17%. In this light, a 17% run is not indicative of what may or may not lie ahead. However, an anticipated run of 100% or more cannot start unless it first advances 17%!

PRICE RUN DATES GAIN
$1180.20 - $1433.73 24/06/13-26/08/13 21%
$1182.35 - $1388.54 30/12/13-17/03/14 17%
$1130.02 - $1307.64 30/11/14-19/01/15 16%

May I also offer an opinion on the 200 day moving average which has been breached by this current move? This average has been breached three times previously while gold has been bounded by this weekly channel. The truth is that moving averages are not good technical indicators when the price action is whipsawing in this manner. What we need to see now is gold breaking through this upper channel line, but also presses on.

By that I mean, the last two and half years have been a continuing series of lower lows and lower highs. So, let's see if gold can take out the previous high of January 19th 2015 when gold hit $1307. When that happens, gold would have moved 20% which technically constitutes a bull market and then perhaps we can begin to talk about a serious bull market in precious metals.

 


Further analysis of silver can be had by going to our silver blog at http://silveranalyst.blogspot.com where readers can obtain subscription details for the Silver Analyst newsletter. Comments and questions are also invited via email to silveranalysis@yahoo.co.uk.

 

Back to homepage

Leave a comment

Leave a comment