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

Gold Price Reversal

The Gold market continues to be lethargic. Two weeks ago, negative rumblings about Deutsche Bank pushed Gold higher out of the Half Cycle Low. But the move quickly stalled on a gold price reversal, ensuring that the current Daily Cycle (DC) would remain Left Translated.

Gold's current sluggishness is not unexpected, however. 18 weeks into any Investor Cycle should see sellers largely controlling the action, and I'd expect that to be the case with Gold until it finds an Investor Cycle Low (ICL).

Daily Gold Chart

Considering the advanced age of the Investor Cycle (IC), it's impressive how well Gold has held up. And it's a boost to bulls that the Miners and Silver are following suit with relative strength of their own. The broader precious metals complex appears to be consolidating its massive gains from early 2016 via time, rather than price, and that's decidedly long term bullish.

The Miners, in particular, provide a case in point. GDX rose 120% in 6 months to start 2016, and in the 2 months since topping have retraced a relatively meager 20%. I've discussed the volatility of the Miners frequently, so readers will know that such relative strength during a move into an ICL is extremely bullish for the intermediate and longer terms.

VanEck Vectors Gold Miners ETF Weekly Chart

It's easiest to see the Gold's bullish consolidation via time on the Investor Cycle chart. Gold topped 12 weeks ago and has a failed Daily Cycle behind it, yet is down only $70 from the IC peak. It's a classic bull market consolidation of the huge six-month rally, and is a significant change in character from what we all lived through during Gold's bear market.

A Gold Price Reversal is on the way, make no mistake about it, but we may need to be patient as we wait for it. Gold could need another full Daily Cycle lower before finding its ICL, and that would mean another 4-5 weeks of declines.  Rest assured, however, that the bull market trend is firmly established. During the next series of higher IC's, I expect the general public to again pay attention to Gold.

Gold Weekly Chart


Trading Strategy

Long term investors should already be holding a strong core portfolio. Short term fluctuations in the Gold Price market should only be viewed as an opportunity to add to long term positions. If you're under invested, I personally would not wait for a Cycle Low, this price level is more than attractive.

Traders should be flat or short this market currently. There is a real possibility that we're going to see a large stop run below $1,305 on gold and the Sept 1st lows in the precious metals miners. Within 5 to 10 trading days however, we should see a Cycle Low and reversal form, providing an excellent opportunity for traders to get Long this sector for what could be a promising new Daily and Weekly Cycle.

 


The Financial Tap – Premium

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.

NOTE: The Financial Tap offers you a Full 14 day, no risk, money back Trial. It’s just $99 thereafter for a full 3 months of membership, a fraction of what one stopped out trade is likely to cost you. Consider joining The Financial Tap and receive two reports per week and the education you need to become a better trader or investor See >> SIGN UP PAGE!

 

Back to homepage

Leave a comment

Leave a comment