Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Price Look Out Below

Commodities / Gold and Silver 2014 Oct 04, 2014 - 01:37 PM GMT

By: Sy_Harding

Commodities

Gold experienced a spectacular bull market run from its low at $250 an ounce in 2001 to its peak above $1,900 an ounce in 2011. Its long bull market was largely supported by expectations that the Fed’s easy money policies would create spiraling inflation, of which gold, the historical hedge against inflation, would be the big benefactor.

However, spiraling inflation did not materialize. In fact, inflation remained quite benign, and in 2011 gold gave up on the idea. It rolled over into a 37% bear market decline to $1,200 an ounce.


As with most bear markets, it was not a straight line down. There were rally attempts that kept hope alive, but they ended at lower highs, followed by declines to lower lows.

For the past 18 months, although the lower highs continued, there were no further lows. It looked like gold might actually be establishing a base from which to launch a new bull market.

A significant decline in the U.S. dollar supported that hope. Gold and the dollar have an inverse-relationship, gold usually rising when the dollar is declining, and falling when the dollar is rising.

However, our technical indicators triggered a new sell signal on gold, and it fell back beneath its 30-week m.a., and has continued lower.

And in the background the U.S. dollar began spiking up in May.

Also among the fundamentals, the previous inflation concerns moved even further out of the picture. Recent reports of even lower PPI and CPI inflation in the U.S. and in the euro-zone have concerns rising that the real problem may even become global deflation.

It also became more apparent that gold was in trouble when it was unable to rally to any extent as a safe haven in reaction to the growing number of global hotspots and uprisings in recent months.

Meanwhile, I pointed out in a recent column that gold was dropping toward a level that would be its last potential stand.

Gold had been confined in a symmetrical triangle formation. The direction of the breakout from such a formation usually determines the next sustained direction.

So, it was not a positive for gold when it broke out of that formation to the downside and immediately headed lower.

I noted that the critical level was its previous low at $1,295 an ounce. A break below that would put it at a new bear market low and in uncharted territory.

With the U.S. dollar spiking up further in reaction to Friday’s employment report, gold has been trading as low as $1,189 an ounce.

With our technical indicators, both short-term and intermediate-term, remaining on sell signals, I believe gold is headed lower. If so, it looks like next potential support is just under $1,000 an ounce.

Sy Harding is president of Asset Management Research Corp., and editor of the free market blog Street Smart Post.

© 2014 Copyright Sy Harding- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Sy Harding Archive

© 2005-2022 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