• 12 hours India To Auction 41 Coal Assets
  • 20 hours Eldorado Sees Gold Production Soar In Second Quarte
  • 2 days Do Gold Stocks Still Have Upside Potential?
  • 2 days The S&P 500’s Top Companies Hold $2.5 Trillion In Debt
  • 3 days Electric Vehicle Rebound Bolsters Battery Metal Growth
  • 3 days BlackRock Makes A Run On Asian Stocks
  • 4 days Gold Prices Surge Above $1,800
  • 4 days Chinese Stocks Soar On Bullish Economic Data
  • 5 days Apple’s “Holy Grail Of Data” Leaves Energy Traders Disappointed
  • 5 days Gold Rally Adds $250 Billion To Top 50 Miners' Market Cap
  • 5 days TikTok Is Becoming A New Battleground For Tech Politics
  • 6 days Peru's Mining Industry Pummeled As Coronavirus Cases Surge
  • 6 days Why The World Is So Divided In Its COVID-19 Response
  • 6 days Equities Cheer Stellar Jobs Report, But It May Be Fleeting
  • 7 days Is Tech Billionaire Peter Thiel Done With Trump?
  • 8 days Musk Takes To Twitter To Troll The SEC
  • 9 days Lunar Mining May Commence As Early As 2025
  • 9 days Immigration Will Go Bust Without $1.2B Bailout
  • 10 days The Economics Of The Space Race
  • 11 days Why The World's Central Banks Aren't Yet Sold On Renewables
Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

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