Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19
Is the Stock Market Making a V-shaped Recovery? - 11th Aug 19
Precious Metals and Stocks VIX Are About To Pull A “Crazy Ivan” - 11th Aug 19
Social Media Civil War - 11th Aug 19
Gold and the Bond Yield Continuum - 11th Aug 19
Traders: Which Markets Should You Trade? - 11th Aug 19
US Corporate Debt Is at Risk of a Flash Crash - 10th Aug 19
EURODOLLAR futures above 2016 highs: FED to cut over 100 bps quickly - 10th Aug 19
Market’s flight-to-safety: Should You Buy Stocks Now? - 10th Aug 19
The Cold, Hard Math Tells Netflix Stock Could Crash 70% - 10th Aug 19
Our Custom Index Charts Suggest Stock Markets Are In For A Wild Ride - 9th Aug 19
Bitcoin Price Triggers Ahead - 9th Aug 19
Walmart Is Coming for Amazon - 9th Aug 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Gold Uptrend Lacks Enthusiasm

Commodities / Gold and Silver 2011 Feb 20, 2011 - 07:19 AM GMT

By: Merv_Burak


Best Financial Markets Analysis ArticleWell, it was up, up all week long for gold.  However, there seemed not to be any enthusiasm behind the move and trends do not last long without enthusiasm.  Maybe it will enter this coming week.


Over the past few weeks I had mentioned that my long term P&F chart gave a bear signal BUT that there was still one more support level on the chart that needed to be breached for that bear signal to have meaning.  Well, as we have seen, that support has held and we have been in a rally for the past three weeks.  The big question now is, is this only a rally or are we in for a new bull move?  I’m not very good at predicting the future.  It’s enough effort just to understand where we are right now least of all where we will be next week or month.  So, where are we right now?

From a long term perspective, although it does appear as if gold has been in a several month topping and turning mode it remains above its positive sloping moving average line.  The long term momentum indicator has been moving lower and lower since October but is in one of its upward turns.  It is still in its positive zone and now above its long term trigger line.  The trigger line has also turned upwards which is a very positive sign.  The volume indicator has been moving sideways since December and is very close to breaching into new high ground.  During this sideways period its trigger line has moved right up to the indicator and has flattened out but still is in a very, very slight up slope.  Everything is still looking okay for the long term.  The rating remains BULLISH.


 The intermediate term perspective is also okay.  Gold has crossed above its intermediate term moving average line during the week and the line itself has turned to the up side.  The intermediate term momentum indicator was in its negative zone for a few days but has once again crossed into its positive zone.  It is also above its positive sloping trigger line.  The volume indicator is slightly positive and above is positive trigger line.  All in all the intermediate term rating remains BULLISH.  This rating is confirmed by the short term moving average line crossing above the intermediate term line.

There are many, many technical indicators one can look at to assess where we are but these simple indicators tell us the trend, strength of the trend and interest by speculators in the trend.  What more do we need?  We wouldn’t be right all the time but I hope we are right most of the time.  More importantly, we should not be wrong for any length of time to cause major financial losses.  We do not blindly hold as the trend goes against us.  That is the sign of an amateur.



The short term has been great for the past few weeks but could be coming to an end.  We are inside an upward trending wedge pattern.  These patterns unfortunately are most likely to be broken on the down side.  The strongest move would come when the price is two thirds along its way towards its apex point.  As it continues closer and closer to the apex the strength of any break becomes less and less.  So, we are not yet at the strongest location should the price break below the lower support line.  That would still take a couple more weeks of steady up trend within the confines of the wedge.  From here, that does not look probable, so, we should get a break soon but not one that is of any great strength (or longevity).

For now the short term position of gold remains basically positive.  Gold has been above its short term moving average line for over two weeks and remains above.  Its moving average line remains sloping in an upward direction.  As for its short term momentum indicator, well that is comfortably in its positive zone and above its positive trigger line.  Only the daily volume action leaves a lot to be desired.  During its entire few weeks of price rally the daily volume has remained relatively low.  It had remained below its 15 day average value throughout the advance.  This does not bode well for longevity of the rally.  However, despite the poor volume showing the short term rating remains BULLISH with the very short term moving average line confirming by remaining above the short term line.

With events as volatile as they are in global politics I wouldn’t even try to guess the immediate direction for gold.  The direction of least resistance, however, seems to be getting closer and closer to the down side.  The Stochastic Oscillator remains in its overbought zone and can’t stay there for much longer.  The next turn to the down side by the SO should also see gold turn lower.



Silver continues to put in a great performance versus gold.  This past week gold advanced by 2.1% while silver advanced 7.7%, almost 4 times the weekly performance.  The chart shows that silver has entered new bull market highs and is heading towards its all time high in the low $40s way back in January of 1980.  Depending upon the chart one uses the all time high in silver was about $41.50.

A few weeks back silver gave a P&F bear signal, however, I had mentioned a support just below the break that needed to be breached before really going bearish.  That support held and silver quickly moved higher.  We need to go back to the P&F chart of 17 Dec 2010 where I still had projections to $32.50 and $34.00 that were not met at that time.  Well, the recent sharp rally has met the $32.50 projection.  Now, on to $34.00.  However, with the latest move a new projection can be calculated, to the $42.00 level, just $0.50 above silver’s all time high.  One thing all these projections seem to say is that there is still more upside potential for silver.

Without going into details, one can guess that the ratings for silver in all three time periods is BULLISH. 

For a cautionary note it is interesting that silver price is now butting up against the previous support up trend line, which can now be considered as a resistance line.  Couple this along with weakness in both the momentum and volume indicators and we have the prospect of a reaction very soon.  I would suspect that any reaction off that resistance line would not stop at the very narrow up trending channel lower support but break below it also.  Just something to be aware of.


All precious metal stock indices had a good week, some better than others.  The silver stocks were, of course, the better weekly performers as is noted by the Indices that have silver stocks as their major components.  Although the Indices had a good week ONLY the Merv’s Penny Arcade Index made it into new all time high territory.  Go pennies GO.  This is one of my best indicators that the major long term bull market in precious metal stocks is not yet over and still has more to go.  During the last bull market top when the major Indices (and gold and silver stocks) topped out in early 2008 this Penny Arcade Index topped out a year before the majors.  I don’t expect the same year’s notice but I do expect that the pennies will top out before the universe of precious metal stocks top out and therefore we should have this advance warning.

The Penny Arcade IS weakening as far as the momentum (strength) of the recent move is concerned.  Although the Index has made new highs the momentum indicator is still below its previous recent high.  This is not yet a serious concern as the indicator is very strong, above the 80% level so a slight weakness is not a big deal, but it is so far a weakness in the latest move.  Something to watch.

Merv’s Precious Metals Indices Table

It should be noted that the Index values for the FTSE Indices are for the period Thursday to Thursday.  For some reason my data vendor does not provide the most recent data for these Indices.  I would welcome suggestions for obtaining same day Indices values for the FTSE gold Indices.

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

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 .

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 . 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 - 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