Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold, Silver & HUI Stocks Big Pictures - 28th Sep 20
It’s Time to Dump Argentina’s Peso - 28th Sep 20
Gold Stocks Seasonal Plunge - 28th Sep 20
Why Did Precious Metals Get Clobbered Last Week? - 28th Sep 20
Is The Stock Market Dow Transportation Index Setting up a Topping Pattern? - 28th Sep 20
Gold Price Setting Up Just Like Before COVID-19 Breakdown – Get Ready! - 27th Sep 20
UK Coronavirus 2nd Wave SuperMarkets Panic Buying 2.0 Toilet Paper , Hand Sanitisers, Wipes... - 27th Sep 20
Gold, Dollar and Rates: A Correlated Story - 27th Sep 20
WARNING RTX 3080 AIB FLAWED Card's, Cheap Capacitor Arrays Prone to Failing Under Load! - 27th Sep 20
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelerting Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Gold Hits Lowest Close in Two Months

Commodities / Gold and Silver 2011 Jan 16, 2011 - 12:07 AM GMT

By: Merv_Burak

Commodities

Gold has hit its lowest closing level (but not yet its intra-day level) in almost two months.  The intermediate term momentum indicator is at its lowest level since early August.  The price action seems to be developing a weaker and weaker strength, not usually a good sign.


GOLD : LONG TERM

            

I mentioned the intermediate term momentum weakness in the introduction.  Even the long term momentum is showing greater weakness than the price action.  The indicator is well below recent levels while the price is still holding its own, but weakening.  The long term weekly price/momentum chart shows the two year old up trending channel in the price action and the support line in the momentum.  The momentum support appears ready to be breached but the price action is still some distance from its channel support line.  The weakening momentum may be more of a sign of intermediate term reversal than a long term reversal.  There is still a long way to go for the momentum to get into its negative zone (below 50%).  The one thing that this action DOES suggest is that one should hold off on new purchases until things get a little stronger or if one just must buy then one should understand that one is doing so at a time of much greater risk of reversals.  Since the indicators are not yet bearish one would not be on the sell or short sell side as far as long term commitments are concerned.  Most likely what lies ahead may be a very good new buying opportunity but not yet.  The daily and weekly action should tell us when it’s ready to start new purchases again.

The long term P&F chart looks like it’s in a topping process but is still some distance to a reversal signal.  That would come on a move to the $1320 level if we get no further up and down activity (although $1305 might be a better reversal point).

As for the normal long term indicators, gold remains comfortably above its positive sloping moving average line.  The momentum indicator is still well inside its positive zone although it is heading lower and is below its negative sloping trigger line.  As for the volume indicator, it is starting to show weakness with the price action and has been flirting with its trigger line.  On Friday it remained above its trigger line but only slightly so.  The trigger is still in a positive slope for now.  All in all the long term rating remains BULLISH.

INTERMEDIATE TERM

Things do not look good from the intermediate term perspective.  Gold has now moved below its moving average line and the line slope has just turned slightly downward.  The momentum indicator is moving lower fast but is still slightly above its neutral line in the positive zone.  Another negative day might put it below the line.  The momentum indicator is below its negative sloping trigger line.  The volume indicator is now below its trigger line and the trigger has turned to the down side.  Everything seems to be a bummer from the intermediate term so the rating has now gone full BEARISH.  However, the short term moving average line is sitting right on top of the intermediate term line (both have the same moving average value) and one cannot yet claim it to be confirming the bear, that should come on the next trading day.

SHORT TERM

          

I showed this channel last week.  The gold action may be said to have just penetrated the lower support line but I’ll give it another day to see if there is any follow-through.  Depending upon the thickness of the line used one could say that gold had not quite penetrated the line yet.  In any respect it does look like the direction of motion should take gold decisively below the line very, very soon.  How significant would such a break be?  Well, it would be a support break but we already have a moving average break and negative ratings for the shorter time periods so this would be just one more indication that things are not all that rosy.

Gold dropped below its short term moving average line (15 DMAw) about two weeks ago and remains below the line.  The line itself is tracing a negative path.  The momentum indicator is in its negative zone below a negative trigger line.  As for the daily volume action, that has been above its 15 day average volume for the past two weeks now, during the down price days.  Not a good sign.  For now all the indicators are saying BEARISH on the short term.  The very short term moving average line is confirming this bear by remaining below the short term moving average line.

As for the immediate direction of least resistance, that would have to be to the down side but who knows what global fiasco lies ahead to affect gold.

SILVER

          

Although silver still has a better [performance than has gold, for all three investment time periods, silver has been acting weaker lately.  Once more it declines more than gold did this past week although the difference was minor.  The initial projection for such break would be to the $21 level which is on top of the previous significant consolidation period and does sound like a good place to halt.  But that is getting ahead of the game, first the break. 

The P&F chart shown this week suggests that silver is in a very precarious position.  A move to the $28.00 level will cause it to break below a very solid support but it would need another $0.50 to break below the up trend line so $27.50 is the number to watch.  On a daily bar chart silver has already broken below an up trend line so maybe that is a warning of things to come.

The short and long term indicators are basically similar to the gold indicators giving us a BULLISH rating for the long term and a BEARISH rating for the short term.  On the intermediate term there is a difference.  Although silver has just very slightly closed below its intermediate term moving average line the line slope is still to the up side.  The momentum indicator is moving lower fast (similar to gold) but it is still in its positive zone.  It is, however, below its negative trigger line.  As for the volume indicator, it is now two weeks into being below its trigger line and the trigger is pointing downward.   On the intermediate term the rating is not quite fully bearish yet but is at the – NEUTRAL level.  The short term moving average line is still somewhat above the intermediate term line and not yet at a position to confirm any bearish rating so we have to wait at least a few days to see if the intermediate term reverses.

I know that often my ratings in these commentaries could be slightly different from those in the Table.  I use slightly different indicators than those that are pre-programmed to develop the Table ratings.  However, the two should not be in opposition for more than a weeks or two before they both are the same.

PRECIOUS METAL STOCKS.

That Merv’s Penny Arcade Index just keeps plugging away.  While all else is disaster around it this Index has gained another 3.2%.  One of the strongest indicators that even should the universe of gold and silver stocks go into a bear market it would not be expected to last for too long before turning back to the up side towards new highs.  It is unheard of for the whole sector to go into a major bear market while the pennies continue in their “sky is the limit” track

Well, that’s it for this week.  Comments are always welcome and should be addressed to mervburak@gmail.com.

By Merv Burak, CMT
Hudson Aero/Systems Inc.
Technical Information Group
for Merv's Precious Metals Central

For DAILY Uranium stock commentary and WEEKLY Uranium market update check out my new Technically Uranium with Merv blog at http://techuranium.blogspot.com .

During the day Merv practices his engineering profession as a Consulting Aerospace Engineer. Once the sun goes down and night descends upon the earth Merv dons his other hat as a Chartered Market Technician ( CMT ) and tries to decipher what's going on in the securities markets. As an underground surveyor in the gold mines of Canada 's Northwest Territories in his youth, Merv has a soft spot for the gold industry and has developed several Gold Indices reflecting different aspects of the industry. As a basically lazy individual Merv's driving focus is to KEEP IT SIMPLE .

To find out more about Merv's various Gold Indices and component stocks, please visit http://preciousmetalscentral.com . There you will find samples of the Indices and their component stocks plus other publications of interest to gold investors.

Before you invest, Always check your market timing with a Qualified Professional Market Technician

Merv Burak Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules