DiscoverGold
8 hours ago
Gold No Progress from Bullish Setup
By: Bruce Powers | April 24, 2024
• Gold's price movement shows uncertainty as it approaches key resistance levels. A breakout triggered by a bullish pattern lacks convincing strength, while a bearish indication looms if the 20-Day MA becomes resistance.
There was little upside follow through on Wednesday, following a brief breakout above Tuesday’s hammer candlestick pattern. The high for the day was 2,337 and yesterday’s high was 2,334. Gold ended above the 20-Day MA on Tuesday following an earlier decline below it.
However, it is not yet clear where today’s close will be. Trading is happening around the 20-Day line at the time of this writing. A daily close below the line would be slightly bearish as it would be the first time the gold has closed below the line since the second half of February.
Watching for Further Signs
A bullish pattern breakout signal needs to have additional confirmation of strength following the breakout. Gold is already indicating that the hammer breakout is suspect given the relationship to the 20-Day MA. Also, the rise above yesterday’s high was minor and not convincing. It doesn’t show a clear improvement in demand. Further, notice that today’s high of 2,312 found resistance at a top channel line that had been part of a support zone until Monday’s sharp decline.
Tuesday’s Strength Needs Upside Follow Through
Tuesday’s low of 2,291 completed a 50% retracement level of the internal trend. The subsequent bullish hammer candlestick and daily close above the 20-Day line indicated that the retracement in gold may have completed. However, an upside breakout and subsequent additional signs of strength were needed.
The breakout has been triggered but there are not yet additional signs of strength. A daily close today above the 20-Day would be one sign, but minor. Then, another breakout above yesterday’s high followed by a daily close above it will provide additional confirmation.
20-Day MA is Key
Also, on the bearish side, a daily close below the 20-Day is a bearish indication. Further, today’s low of 2,312 could trigger short-term weakening as gold again approaches yesterday’s low of 2,291. If that low is broken to the downside, then a deeper correction is likely. The next lower target would be around the 38.2% Fibonacci retracement of the full swing that began from the February swing low. That price level is at 2,261 and includes the 61.8% retracement of the internal upswing at 2,255.
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DiscoverGold
1 day ago
Gold Intraday Bullish Reversal Shows Strength
By: Bruce Powers | April 23, 2024
• Gold completes a 50% retracement, rebounds to 2,334, signaling potential upside breakout.
Gold completed a 50% retracement today with a low of 2,291 before buyers took control and ran the precious metal up to a high of 2,334, at the time of this writing. Earlier in Tuesday’s session the sellers were in control and dropped gold down to below its 20-Day MA to test support around the 50% retracement of the internal upswing. The 50% level is at 2,289. That is close enough given the subsequent bullish reaction following that low.
Quick Recovery of 20-Day Line is Bullish
Since around February 23 gold has been trading above the 20-Day line. Today was the first direct test of the line as support since then. Although it failed to maintain support, gold may close above the line with a bullish doji hammer candlestick pattern. Both a close above the 20-Day MA is bullish, and the fast recovery of the line is also bullish. It points to the possibility that a correction may be complete, or at least for now.
Upside Breakout Above Tuesday’s High
An upside breakout will be triggered on a rally above today’s high of 2,334, while a drop below today’s low of 2,291 signals a continuation of the correction. Also, gold could trade tomorrow inside day, which would provide a setup for Wednesday. A rally will be heading up into a potential resistance zone that arguably starts from around 2,354. Also, keep an eye on potential resistance around the 8-Day MA at 2,362 and this week’s high of 2,389.
Long-term Base Breakout in Play
Gold broke out of a multi-year basing pattern recently, which greatly improved its chances to continue to strengthen and trend higher following a correction. The degree and length of the current correction will tell us something about underlying demand. It should not be surprising if it stays strong given the significance of the long-term breakout. Upward momentum really kicked in upon the breakout of a symmetrical triangle on February 29. By March 5 a new record high in gold had been reached.
Drop Below 2,291 Starts a Deeper Retracement
There will likely be a retracement to test support around the orange 50-Day MA at some point during the advance. However, so far, it doesn’t look like it will happen in the current correction. Nonetheless, as noted above, a drop below today’s low of 2,291 could accelerate that scenario. But first there is potential support around the 2,261-price area, which the 38.2% Fibonacci retracement of the bull upswing, beginning from the February 14 swing low.
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DiscoverGold
2 days ago
Gold Continues to Slump
By: Christopher Lewis | April 23, 2024
• The gold market has drifted lower again in the early hours of Tuesday, as we continue to see the idea of a widening war in the Middle East disappear, at least for now. However, there are other reasons to think that the gold market could find buyers eventually.
Gold Markets Technical Analysis
The gold market fell again during the early hours on Tuesday, as you can see, testing the $2,300 level pretty quickly in the day. That being said, this is a market that I think will end up seeing a move lower, perhaps down to the 50 day EMA. After that, we would have $2,200.
So, with that being said, it does suggest that we’re probably more likely than not to see a little bit of selling pressure. And I think part of this comes down to the fact that the geopolitical concerns have kind of calmed down with even the Iranians saying that the Israelis had received the appropriate response. So, if that’s going to be the case, it does take that piece out of the decision making.
That doesn’t mean the gold will start to fall apart or that the trend is over. What it does mean is we are likely to have an opportunity to buy it at lower pricing. The 50 day EMA, the $2,200 level, I think both would be excellent entry points if we get that. But what I’m going to do is wait for a daily candlestick that ends up forming something like a hammer or signs of an impulsive move to the upside that I would take advantage of the relative strength index is now well within normalcy.
So, I think that’s something to keep in mind as well. We are far from the overbought condition that we had been in, so I will probably stop paying as much attention to that. Either way, I think you do get an opportunity for value play. Hopefully, we will drop another $100 and make it a truly strong opportunity, but we’ll just have to take what the market gives us.
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DiscoverGold
3 days ago
Gold prices have another 50% upside through 2025 if inflation jumps again, market vet says
By: Business Insider | April 21, 2024
• Gold could soar as high as $3,500 an ounce by the end of next year, market vet Ed Yardeni predicted.
• That implies a nearly 50% upside for gold, if inflation surges to a second peak, Yardeni said.
• Other economists have warned of a second peak in inflation, thanks to price pressures lingering in the economy.
Gold prices could soar through the end of 2025 if inflation stages a comeback, according to market veteran Ed Yardeni.
The Yardeni Research president predicted that gold prices could rise as high as $3,500 by the end of next year, implying as much as a 49% upside for the precious metal from Monday's price around $2,347. That's because inflation could follow the path it did in the 1970s, when prices began to spiral and gold went from $35 an ounce to a peak of $665 an ounce.
"The price of gold is soaring in new high territory," Yardeni said in a note to clients on Sunday, referring to gold prices notching an all-time record in March. "Another wage-price spiral attributable to rising oil prices would be very reminiscent of the Great Inflation of the 1970s, when the price of gold soared. In this scenario, $3,000-$3,500 per ounce would be a realistic target for gold through 2025."
Consumer prices have cooled dramatically from their highs above 9% in 2022, with inflation rising 3.2% in February, but market commentators have warned of a potential resurgence of inflation thanks to supply-chain disruptions stemming from geopolitical conflicts and the strong US labor market.
Inflationary pressures are also being exacerbated by the recent run-up in crude prices, with Brent crude rising past $90 a barrel last week as OPEC+ producers announced they would continue their output cuts.
If conflict in the Middle East escalates, oil prices could rise over $100 a barrel, Yardeni predicted. He estimated there was a 20% chance inflation could rise to a second peak, which would result in the bullish run-up for gold.
Yardeni isn't the only forecaster who sees more upside for gold in the years ahead. Top economist David Rosenberg said he saw 30% upside for gold prices, thanks to the risk stemming from the Fed's expected rate cuts and rising geopolitical conflict.
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DiscoverGold
3 days ago
Gold Fit to Pull Back a Bit
By: Mark Mead Baillie | April 21, 2024
Two missives back we penned “Gold ‘Overbought’ is Great!” and so ’tis been. These past couple of months have finally seen a long overdue repricing of Gold from some three years of being range-bound in the 1700-2000 zone to now up through our forecast high for this year of 2375 and onward to a new All-Time High at 2449 recorded just over a week ago (on 12 April).
And yet whilst championing this latest ascent, we’ve warily pointed throughout the extent to which Gold has become technically stretched such that we “know” retrenchment is to be expected. And we say that with 100% respect due the opening Gold Scoreboard’s Dollar debasement valuation of 3723, given price settling this past week yesterday (Friday) at “only” 2407, itself an All-Time Weekly Closing High. Yet to repeat that from a week ago: “…near-term Gold is very over-extended; but broad-term Gold remains very undervalued…” We can’t quintessentially put it any better than that.
‘Course a key metric we regularly watch as is the case for all five components which comprise the primary BEGOS Markets, (Bond / Euro / Gold / Oil / S&P 500) is Gold’s smooth valuation line which specifies a near-term value based on price’s day-to-day movement relative to the other four BEGOS components. (The website’s Market Values page displays same for all five markets). Indeed invariably through a generation (which for you WestPalmBeachers down there is 25 years) of calculating Market Values, ’tis axiomatic that price and valuation regularly re-meet. And per the following left-hand panel of Gold’s daily closes from three months ago-to-date vis-à-vis the smooth valuation line, price at present (per the difference of price less value) is right now +195 points “too high”. (The right-hand panel is the same drill for the S&P 500, near-term oversold, but upon which we’ll later expound):
Still therein for the yellow metal, the good news is the smooth valuation line itself is rising such that price need not actually drop -195 points; (the pace of the smooth line’s ascent exceeded +5 points every day last week). Regardless: price (2407) remains sufficiently high above value (2212). On a percentage basis that is a +8.8% gap: the last period of such upside percentage excess was during the onset of the RUS/UKR incursion during early March 2022, following which within the ensuing 10 weeks Gold fell better than -200 points. And to the extent Gold’s recent buoyancy is arguably due to fresh Middle East conflict, we’ve herein demonstrated over the years that geo-political price spikes for the yellow metal are short-lived. Further, as the website’s Market Values page is a bona fide leading indicator of direction, even as Gold of late has been getting the bid, again we remain wary of price having reached a near-term lid.
Too from the technical tent, Gold by its “continuous futures contract” is approaching a flip of the daily parabolic measure from Long to Short: currently 2407, were 2386 to trade on Monday, such Short (albeit a bad idea) would be in play; and Gold’s average price decline across the past 12 such Short signals is -353 points (just in case you’re scoring at home). But no, we do not expect anything of such downside magnitude this next time ’round.
‘Course, all this near-term negative awareness may be moot given the International Monetary Fund having stated this past week that “Something will have to give” with respect to what is deemed as an unsustainable level of U.S. debt and thereto its global fallout ramifications. “Got Gold?” Again, despite price’s record highs, fundamentally ’tis still cheap and it looks great:
“And I added a lavendar-bounded support area in there, mmb…“
Nicely done, Squire, in that view of Gold’s weekly bars from a year ago-to-date. And we concur: your 2150-to-2000 area does look structurally-supportive for Gold, and notably enhances the notion that the sub-2000 days are gone. Indeed should near-term price weakness come to the fore, that year-over-year graphic really encompasses Gold’s soar. And ultimately, we’ll see more.
Now having just mentioned the IMF, ’tis a nice segue into the StateSide Economic Barometer. For with respect to the U.S. economy, the IMF also penned on Tuesday: “The exceptional recent performance of the United States is certainly impressive and a major driver of global growth…” We cite as well their chief economist Pierre-Olivier Gourinchas: “The strong recent performance of the United States reflects robust productivity and employment growth, but also strong demand in an economy that remains overheated…” Is that your takeaway per the Econ Baro from a year ago-to-date? Is the economy really that great? Or shall it stagflate as we’ve suggested is its state of late?
Last week brought 13 metrics into the Baro: but period-over-period, just four improved. Moreover, ’tis Q1 Earnings Season: thus far for S&P 500 constituents, 51 have reported with just 30 having increased their bottom lines from a year ago. But this is the mighty “best of the best” S&P 500: should not all entities therein be improving; (a bit tongue-in-cheek perhaps, but to be fair, in a decent Earnings Season at least 70% improvement at the S&P level ought be expected; thus far just 59% have made more money, albeit ’tis early).
However, even as the aforeshown green Market Values graphic of the S&P shows its futures as sufficiently oversold, the truth remains that earnings are not supportive of price: the “live” price earnings ratio of the S&P settled yesterday at 43.1x. Reprise yet again one Jerome B. Cohen: “…in bull markets the average [P/E] level would be about 15 to 18 times earnings.” Recall our notion in recent years of a “Look Ma, no earnings!” crash?
Or if you prefer more lately, a “Look Ma, no money!” crash? The current market-capitalization of the “Casino 500” now at $43.3T is just 48% supported by the liquid U.S. money supply (M2 basis) of only $21.0T. So when you sell, how’s your broker’s “I.O.U.” gonna work out for ya? Nuff said.
And yet has enough been said by the Fed? No. For on the heels of former TreasSec Larry “Oh Not That Guy” Summers in the week prior having cautioned the Federal Reserve’s next rate move could possibly be up rather than down, just this past Thursday at the Semafor World Economy Summit, New York FedPrez John “It’s All Good” Williams said: “…if the data are telling us that we would need higher interest rates to achieve our goals, then we would obviously want to do that…” Obviously indeed. You regular readers know we’ve been musing well ahead of the curve about rate hike(s) since our first missive of this year. And ’tis been better than 30 years since upon pushing Barbie’s button she said “Math class is tough.” As we oft harp, these days it seems no one does math; rather, they parrot. “Well, it was on the news, ya know…”
Yet hardly can enough be said about the precious metals having run ahead, both Gold and Silver as thoroughbreds! In fact amongst the entire BEGOS pack, Silver now leads the year-to-date percentage tracks at +19.6%, followed by Oil +16.7% and then closely by Gold +16.2%. (The S&P’s once-inane gain has now fizzled to just +4.1%; we’ll display the whole bunch in next week’s “month-end” edition of the Gold Update).
But specific to Gold below on the left and Silver on the right, historically one is hard-pressed to find such like uptrend performance. Why, even the “Baby Blues” of trend consistency having fallen a month ago below their key +80% axis could not forestall further price-rise by any material degree. Still: that +80% level is critical to watch, for upon being breached, the rule rather than the exception is lower price levels near-term; (the “Baby Blues” you can find updated daily, ‘natch, on the website):
Turning to the 10-day Market Profiles for the precious metals, you also can clearly see the bulk of trading for both Gold (at left) and Silver (at right) as centered in their respective price stacks. The most dominant prices therein traded are as denoted:
Next week bring 10 metrics into the Econ Baro, the two most viewed to be:
• The first peek at Q1 Gross Domestic Product, the growth pace for which is expected to have slowed from that in Q4, and
• March’s “Fed-favoured” Personal Consumption Expenditures Prices, such paces not expected to have eased from those in February.
Nonetheless, despite a pending dip in the price of Gold, ‘tis best you continue to grab more and hold!
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DiscoverGold
4 days ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | April 20, 2024
The NY Gold Futures has been in an uptrend for the past 2 days closing above the previous session's high. The broader rally has peaked with the last high established at 24488 back on 04/12 5 days ago. Up to now, we have not yet elected any Bearish Reversals from that high. Clearly, this high was formed after a rally of 42 days.
Currently, the market is trading in a neutral position on our indicators but it is trading strongly higher up some 2.35% from the previous session low. Our projected target for closing resistance for the next session stands at 24646, we need to close above that target to imply a further advance. Failure to even exceed this intraday warns that the upward momentum is starting to decline. Nevertheless, this session closed below our ideal projection for closing resistance warning that the market which stood at 24453 is forming a high. A break of this session's low of 23868 will warn that we have a potential temporary high in place.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Clearly, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Looking at the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bullish currently with underlying support beginning at 23792 and overhead resistance forming above at 24148. The market is trading closer to the resistance level at this time. An opening above this level in the next session will imply that a bounce is unfolding.
On the weekly level, the last important high was established the week of April 8th at 24488, which was up 8 weeks from the low made back during the week of February 12th. Afterwards, the market bounced for 8 weeks reaching a high during the week of April 8th at 23217. Since that high, we have been generally trading down to sideways for the past week, which has been a sharp move of 4.434% in a reactionary type decline. Nonetheless, the market still has not penetrated that previous low of 19964 as it has fallen back reaching only 23402 which still remains 17.22% above the former low.
When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 24488 made 1 week ago. Still, this market is within our trading envelope which spans between 16752 and 26568. The broader perspective, this current rally into the week of April 8th has exceeded the previous high of 20832 made back during the week of January 29th. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals.
Right now, the market is above momentum on our weekly models hinting this is still bullish for now as well as trend, long-term trend, and cyclical strength. From a pointed viewpoint, this market has been trading down for the past week.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 16 months since the low established back in November 2022.
Critical support still underlies this market at 19860 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading above last month's high showing some strength.
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DiscoverGold
5 days ago
Gold’s Remarkable Breakout
By: Gold’s Remarkable Breakout | April 19, 2024
Gold’s powerful breakout in recent months has proven remarkable. But the reason isn’t its fast vertical surge to impressive record heights. This breakout rally is exceptional because gold’s usual drivers aren’t fueling it. Big demand outside of normal channels is catapulting gold deeper into uncharted territory, which is really bullish. That’s preserving capital firepower for buying from gold’s regular speculators and investors.
In the quarter-century I’ve been actively trading gold stocks and writing contrarian newsletters, my focus has always been what’s moving markets and why. That key causal chain from underlying drivers to price action is essential to study and understand, leading to more-profitable trading. Knowing the why markets move leads to superior timing on the when of actually buying low and selling high, increasing trading success.
Every major gold upleg during the past couple decades was fueled by combinations of three sequential stages of buying from specific groups of traders. The first is speculators covering gold-futures shorts, the second is specs buying gold-futures longs, and the third is investors returning to chase gold’s resulting upside momentum as evident in major-gold-ETF holdings. But that model isn’t fully explaining today’s upleg!
Initially it played out according to script. Gold bottomed at $1,820 in early October after a gold-futures-shorting-driven violent breakdown. The very next morning I published an essay concluding “Their shorts in particular are likely challenging major secular highs, which are never sustainable for long. That guarantees huge mean-reversion short-covering buying is imminent, which will catapult gold sharply higher.”
That indeed came to pass, with gold surging 13.8% into early December to $2,071. That proved its first nominal record close in fully 3.3 years, likely to soon fuel frenzied momentum-chasing buying. Normal speculator stage-one and stage-two gold-futures buying drove that, which was massive during that span. Only released weekly, speculators’ aggregate gold-futures positioning data is current to Tuesday closes.
Over the eight Commitments of Traders weeks best matching gold’s initial surge, specs bought to cover 65.0k short contracts and added another 71.5k long ones. That’s equivalent to 424.6 metric tons of gold buying, a massive amount in a couple months! That averaged 17.1k contracts of spec buying per CoT week, which is very large. Specs’ perfectly-normal early-gold-upleg gold-futures buying is evident in this chart.
Gold’s sharp mean-reversion higher out of that oversold and unsustainable early-October low resulted from big spec gold-futures buying. Note that major reversal was first triggered then initially driven by huge stage-one short covering, the red spec-shorts line plunged! That propelled gold high enough for long enough to attract in stage-two long buyers, which is evident in the green spec-longs line soon surging too.
That was all totally normal, the same short-covering-then-long-buying dynamic that fuels most major gold uplegs. But just as gold was finally reclaiming record territory, that spec gold-futures buying was depleting. As this chart illustrates, both spec shorts and longs have secular trading ranges. The lower support zone for the former is around 95k contracts, while the upper resistance zone for the latter is near 415k.
Generally buying peters out around those levels, indicating speculators’ gold-futures buying firepower has been largely exhausted. There aren’t many traders willing to bear the extreme risks inherent in hyper-leveraged gold-futures trading, and the capital they control is relatively small in the grand scheme. So when this gold upleg was born, the distances between current positioning and these zones revealed likely buying.
Back in early October, speculators had probable room to buy to cover 79.4k shorts and add 150.2k longs before hitting 95k and 415k respectively. That added up to 229.6k or 714.0t. But by early December, all that buying had expended much of that upleg’s potential, with specs only having another 14.4k shorts and 78.7k longs left. That was 93.1k contracts or 289.4t, just 4/10ths of that initial buying firepower remaining...
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DiscoverGold
5 days ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | April 20, 2024
• Following futures positions of non-commercials are as of April 16, 2024.
Gold: Currently net long 201.9k, down 496.
Last Friday, gold printed a new intraday high of $2,449 but only to then reverse hard to close the session at $2,361. This behavior showed up after a vicious rally. Last October, the metal bottomed at $1,824 and tagged $2,047 as recently as March 1st. The Friday action could have set in motion a process of unwinding at least some of the overbought condition gold is in.
This week, gold did drop intraday Monday to $2,340 and that was it; the drop to the 10-day was bought, with the remaining four sessions just about trending higher all along the sharply-ascending average, ending the week up 2.2 percent to $2,414/ounce.
Non-commercials are in a wait-and-see mode, with net longs just north of 200,000 contracts in five of the last six weeks. They probably will start worrying if gold loses near-term support at $2,240s and most definitely if breakout retest at $2,080s fails. The yellow metal broke out of $2,080s early March.
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DiscoverGold
5 days ago
Gold Uptrend Faces Challenges
By: Bruce Powers | April 19, 2024
• Gold will complete the week with an inside weak, thereby setting price levels to signal either a move up or down next week.
Gold remains strong and in a clear uptrend, yet risks remain. It has been advancing in a rising consolidation pattern along support of the 8-Day MA since the pullback low on April 10. Bullish momentum has declined during this phase and gold has struggled to sustain a rally. It hit a five-day high of 2,418 today but is on track to close weak, in the lower half of the day’s range, at the time of this writing.
Fibonacci Confluence Zone Keeps Advance at Bay
Last week’s new record high of 2,431 found resistance at the top of an identified range of Fibonacci confluence, where targets of multiple measures line up. Given the subsequent bearish reaction on the same day it looks like the market recognized the resistance zone. The close was in the lower quarter of the day’s range following a new record high. That is not bullish behavior. Nevertheless, interest from buyers has remained strong as gold struggles this week to recapture that high. It has been unsuccessful so far.
Inside Week Sets the Stage
This week will end as an inside week, which is a form of consolidation on that time scale. Therefore, heading into next week a bullish signal would be indicated on a rise above this week’s high 2,418. If upward momentum is then sustained the record high will likely be challenged and possibly exceeded. The next upside target would be the 161.8% Fibonacci extension of the retracement of the large downswing starting from the August 2011 swing high at 2,457.
A 100% retracement completed at that high of 1,921 in July 2020. Further, a measured move completes at 2,480. Each measured move is marked with rising purple arrows on the chart. Since they cover a large time frame the 2,480 target has a good chance of eventually being reached and encountering resistance around that target.
Breakdown Leads to Pullback or Further Consolidation
On the downside, a bearish breakdown signals a drop below this week’s low of 2,324. The 8-Day line will be broken on a move below 2,368 and may provide a warning signal. Support may first be seen around the 20-Day MA, currently at 2,301, while the 50% retracement is nearby at 2,289. Rather than retracing it is also possible gold continues to consolidate near highs as it further prepares for a bullish continuation.
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DiscoverGold
6 days ago
Gold Holds Strong Above Support, Uptrend Intact
By: Bruce Powers | April 18, 2024
• Gold's near-term uptrend remains strong, holding above key support levels. A potential breakout above 2,393 could indicate further price rises.
Gold continues to hold above support around the 8-Day MA indicating that the near-term uptrend remains in place. That dynamic support trend indicator was only breached once in any meaningful way on Monday, but quickly rebounded. You can see how the 8-Day line was initially recognized by the market early in the current swing following the breakout from March 20. This also means that a decisive decline below the 8-Day MA may provide an early bearish signal for when a retracement may be starting. Of course, any signal should be further confirmed by additional confirmation signals.
Holding Above Support Zone
In addition to gold holding above the 8-Day line, it has also been successfully testing support around the two upper channel trend lines that previously identified resistance and now support. This is a sign of strength that shows continuing demand for gold. Today’s price action is on track to complete as an inside day. Therefore, a move above the high of 2,393 will provide the next sign of strength that could see prices rise further. Nonetheless, a breakout above this week’s high of 2,398 is needed for greater confidence that the price may continue to rise from there.
Trading Within Last Friday’s Price Range
Bullish momentum in gold has slowed since the new record high of 2,431 was hit last Friday. That high was followed by a bearish decline, which ended near the lows of the day. It has characteristics of a short-term blow off top. Nevertheless, there has not yet been bearish follow through, which is supportive of the bullish view. But this means that gold may rise above this week’s high yet remain within the wide range from Friday. Therefore, there will not be a clear bullish trend continuation signal given on the daily chart until the 2,431 level is triggered.
Weekly Setup Likely for Next Week
Since Wednesday’s trading is almost complete, it is likely that gold will finish the week with an inside week. If so, it will set up a potential inside week breakout to trigger a bullish continuation. That should provide a more reliable indication of strength than a daily breakout this week. It also means that it is not likely to move to new trend highs this week.
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DiscoverGold
1 week ago
Gold Support Levels Hold, Upside Potential Remains
By: Bruce Powers | April 17, 2024
• With consolidation above key support levels, gold's upside potential remains intact, despite recent caution signals.
Volatility in gold declines on Wednesday as pulls back to find support at 2,361. That is just above the 8-Day MA at 23.59. Another successful test of support at the 8-Day line keeps open the possibility of a continuation of the advance. The 8-Day line has done a good job of identifying support of the sharp rally. Therefore, a drop below the line is a sign of weakening that could lead to a deeper retracement.
Holding Above Support
Moreover, consolidation over the past eight days or so has occurred above support represented by the two top channel trendlines. Whereas previously the lines represented potential resistance. If gold can stay above key near-term support of both the 8-Day line and trendlines, it has a chance of continuing to advance before a deeper pullback than what’s been seen so far.
Demand Remains Strong
A 38.2% Fibonacci retracement was completed on Monday and buyers quickly stepped up to provide support. That day ended strong, in the upper quarter of the day’s price range and above the 8-Day MA. Earlier in the day natural gas had traded below the 8-Day line for a short time. In other words, the sellers had a chance to take it lower, but they could not. With the buyers remaining in chart, the potential for an upside continuation remains. Strength will next be indicated in a rally above Tuesday’s high of 2,398, with an earlier signal generated on a break above today’s high of 2,396.
Caution is Warranted Given Last Friday’s Bearish Signs
Last Friday’s sharp reversal off the new record high of 2,431 indicates caution is warranted for the long side. It has characteristics of a key reversal day that may yet see follow through to the downside. There is a possibility of hitting resistance prior to a new record high as trading is occurring within Friday’s range. Given the recent consolidation near the trend highs and difficulty in moving higher, there is always a risk of a sharp decline.
Of course, those looking to enter gold would likely prefer an entry following a pullback as it will set up a better risk/reward ratio. Nevertheless, a breakout to new trend highs will indicate that a pullback may not be coming before the bull trend continues. Those waiting on the sidelines will be forced to enter or continue to wait.
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trunkmonk
1 week ago
Dollar vs gold, one is fiat, the other is real money. there is no direct relationship. best thing to do is look at gold in relation to the economy, if there is crummy economy, or doubt in its future, then gold is tell tale reaction to it. the Fed used to look at gold as a barometer to how the economy, and his decisions are doing. now central banks are buying gold like never, ever before. they know what is coming, and it aint pretty for the dollar nor the economy. when the banks are switching from the dollar to gold, especially after Basil III, where the gold that is held in a bank is values at 100% of what its worth at that time, u better buy some.
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1 week ago
Gold Market Likely to Work Off Froth
By: Christopher Lewis | April 17, 2024
• The gold markets have gotten too far ahead of itself, and it now looks like we are going to do something about it. Ultimately, this is a bullish market, but it needs to take a break.
Gold Markets Technical Analysis
The gold market on Wednesday was rather quiet as we continued to hang around the $2,400 level, suggesting that perhaps, maybe we have some work to do to continue the upward momentum. After all, gold markets have been on fire recently, and therefore it’s not overly surprising to think that perhaps we are overbought.
The 50 day EMA is reaching the $2,200 level, and therefore, I think you have a situation where the market may come back a bit, but certainly there are plenty of buyers underneath. There are geopolitical tensions out there galore that could make gold attractive. And at the same time, we have central banks out there willing to buy it.
So, with all of that being said, it does make a lot of sense that we could go higher. That being said, gold desperately needs to either go sideways for a while or pull back. The RSI is currently above 70 and that, of course, is an overbought condition as well. So, all things being equal, we either will work off this excess via a pullback perhaps to the $2,200 level, or we may just simply use time to work off the excess as we go sideways.
I don’t like chasing the market all the way up here, as this is a major move, and it makes sense that we would see a lot of volatility in the market over the short term. The market is still bullish, but at this point, I think you have to assume that chasing is going to be a major problem if you attempt to do so.
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1 week ago
Gold Buyers Remain in Control
By: Bruce Powers | April 16, 2024
• Gold's recent bounce off support and completion of a Fibonacci retracement indicate potential for higher prices, but a daily close above last week's high is needed for confirmation.
Following last week’s record high of 2,431 in gold, it has been testing support around the 8-Day MA, now at 2,354. Yesterday, it bounced off a low of 2,324 thereby successfully completing a 38.2% Fibonacci retracement. Also, support has been seen above the two top channel trendlines that cross around April 4 rather than trading below it.
Bounces off 38.2% Fibonacci Support
The subsequent intraday advance bodes well for higher prices. However, it remains to be seen whether that will happen before or after a deeper retracement. Generally, in Fibonacci ratio analysis, the 38.2% retracement is watched as a minimum pullback before the primary trend may exert itself. Since that has been accomplished, a bullish continuation is possible.
Risk of Deeper Pullback Remains
Nonetheless, a daily close above last week’s high is needed to confirm a bullish trend continuation. Until then, another pullback remains possible. A drop below Monday’s low will be a sign of weakness that could lead to a deeper pullback. If hit, gold would then also be clearly below the 20-Day line, a further sign of weakness.
If the 8-Day line is busted, then the 20-Day MA at 2,271 becomes a target. Further, the 50% retracement is slightly above there at 2,289. A little lower is the 61.8% Fibonacci retracement level at 2,255. Support could be seen near any of those price levels. The more significant potential support zone is down near the 50-Day MA at 2,153 and the prior record high of 2,135 from early-December.
Evidence to Suggest at Least a Temporary Top Was Reached
In addition to the Fibonacci confluence zone (more than two Fibonacci levels) seen near the current record high, there is also both time and price symmetry that points to a possible high. Once there is a match with the current advance relative to a prior swing, the chance for a reversal increases.
There have been two legs up off the swing low bottom in October of last year. The first leg up hit a top in 41 trading days. Last Friday’s high was 41 trading days from the start of the second leg up on February 14. Price symmetry is not as close of a match as the first leg up advanced by 17.9% and the second rallied by 22.5%.
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DiscoverGold
1 week ago
Gold Forecast: Cycles Move Into Topping Range
By: Jim Curry | April 14, 2024
From my last article posted in late-March, Gold was in the midst of a larger uptrend, which was expected to hold up into the early-to-mid April timeframe. With that, we are now in the range for a correction for the yellow metal, though one favored to end up as a countertrend affair - against a much bigger upward phase.
Gold's 72-Day Cycle
The last key bottom for Gold came from our 72-day time cycle, which is currently the most dominant cycle for this market - and which bottomed out back in mid-February. From that low, we projected (in advance) a 10-14% rally to play out into April, which has easily been met.
Here again is that 72-day cycle:
In terms of time, the average rally phases with this 72-day wave were noted as having taken 39 trading days before topping, which favored higher highs into April 9th or later. With that, the highest high seen was Friday's (April 12th) peak of 2448.80, which puts us into the expected topping range with this cycle.
As mentioned in my last article, once this 72-day wave turns, a decent correction should be expected to unfold. The downside 'risk' to that correction looks to be at or near our 72-day moving average and/or the lower 72-day cycle band, each shown on the chart that tracks this wave.
Technicals Point to Potential Peak
With the above said and noted, there is at least the potential for Friday's spike up to the 2448.80 figure (June, 2024 contract) to end up as the expected high for our 72-day cycle. This is due to the position of certain technical indications that we track, with the most noteworthy being our Gold Timing Index, shown on the next chart:
With the most recent spike to higher highs for Gold, of note is that our Gold Timing Index (in dark blue) managed to register a minor divergence, which is key - and is something we would expect to see near a peak of 72-day degree (or higher). This is particularly true, when price is trading above the upper 72-day cycle band (in magenta).
Adding to the notes above, in the lowest pane (red) we have our new Gold cycle indicator, which last dropped below its lower (buy signal) reference line at the March 25th close of 2198.20. That signal remained in place until April 5th, with the indicator moving back above its upper reference line - and closing that day at the 2345.40 figure.
With the most recent action, our Gold Cycle indicator is currently dropping, and could move back below its lower reference line in the coming days - thus setting up the next short-term bottom for the metal.
All said, we have a potential peak in place with our 72-day time cycle, though this has yet to actually be confirmed. This would require a push below a key price 'reversal point' that tracks this wave - with the exact details noted in our Gold Wave Trader market report.
Gold's Bigger Picture
For the bigger picture, a correction phase with our 72-day wave - if seen going forward - is anticipated to end up as countertrend, holding well above the mid-February low of 2018.20, the prior 72-day trough.
Support to the coming 72-day cycle downward phase would be at or near the aforementioned 72-day moving average, and/or lower 72-day cycle band - both well below current prices. If correct, we would expect a push back to higher highs - in another rally of some 10-14% or more - playing out into the Summer of this year. That rally would be the technical setup for the next mid-term peak in Gold, coming from a larger 310-day cycle - which we will take a look at again in a future article.
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1 week ago
Gold Market Update - it's CORRECTION TIME...
By: Clive Maund | April 14, 2024
The turnaround in gold and the Precious Metals sector on Friday was really dramatic with gold dropping about $80 from its 11 am EDT peak and this brought out the old explanation about “the powers that be” cratering it by burying it with paper shorts. However, as we will see there may be a simpler explanation.
Gold had risen a lot by last Friday to become extremely overbought and it appears that a part of this rise was due to the fear factor relating to Iran attacking Israel and starting World War 3. This has set gold up for a “sell on the news event” where it drops when Iran actually does attack Israel, especially if, as seems to be the case at the time of writing, Iran simply lobs some fireworks at Israel so that “honor is satisfied” with most of these drones or missiles being shot down and those that arrive do little damage. While hostilities may continue at a low key level it appears that Iran is behaving with some restraint in order to avoid inciting intervention by the US which is Israel’s giant henchman.
To answer the question where gold and the PM sector generally is headed we are probably better using the language of the market itself and seeing what the charts have to say.
The prediction in the last Gold Market update posted on March 16th turned out to be correct as the following chart from that update shows, even if it took a little longer to get moving than expected…
So we will now look at gold’s latest 3-month chart to see what happened, and more importantly what it portends for the future. Before going any further it should be pointed out that because the last prediction was correct, it doesn’t mean that today’s will be.
As we can see, after the last update was posted gold did indeed break out upside from its bull Flag to enter a strong uptrend that took it up to approach $2450 early Friday at which point it had become extremely overbought – only once in the past 10 years has it gotten more overbought, and that was only by a small margin. It has been super-critically overbought on its RSI indicator pretty much all this month so far which itself is a warning, with a much more dire warning appearing on Friday with the dramatic high volume intraday reversal candle that can be described as a gravestone doji / spinning top, both of which are bearish in this position and indicate a reversal. This suggests that Smart Money had figured out that Iran’s attack on Israel would be a “nothingburger” so they took profits. Another reason for gold to consolidate or correct back here is the huge gap that that the price has opened up with the 200-day moving average which is a measure of how overbought it is. If gold does react back how much might it drop? – probably not much given the other much more serious bullish factors in play that aren’t going anywhere. It is thought unlikely that it will correct back further than about $2250 and it shouldn’t drop as far as the preceding Flag.
So what about PM stocks? They also put in bearish candles on Friday with the proxy ETF, GDX putting in a prominent “bearish engulfing pattern” on its chart on Friday as we can see on its 3-month chart below. This indicates a reversal, especially as it occurred on high volume – the biggest for 2 years.
Interestingly, copper also put in a bearish looking candle on quite high volume on Friday, a so-called “gravestone doji” which is where the open and close are close together near to the bottom of the day’s range…
The dollar, meanwhile, has done well on the fear trade, breaking strongly higher above resistance on Wednesday and following through with another big gain on Friday and while it is getting short-term overbought and so might consolidate or react back some, at this point it looks like it wants to go higher still. Some folks on Friday morning thought that we had entered a nirvana where the dollar and gold would rally strongly in tandem, but alas that proved to be false.
So this is thought to be a good time to scale back positions somewhat in the PM sector, with a view to buying back at better prices on a reaction or taking the opportunity to rebalance portfolios to include the strongest stocks in the sector. Where you have big gains in some stocks it might work out well to say take profits on half, then buy back after a reaction or consolidation or reposition into better stocks.
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2 weeks ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | April 13, 2024
This market made a new high today after the past 2 trading days. The market opened higher and closed higher. The immediate trading pattern in this market has exceeded the previous session's high intraday reaching 24488. Therefore, this market has rallied over the past 42 trading sessions. Nevertheless, this market remains well above all seven of our intial support levels. Meanwhile, this market's closing at this time has been the highest during this 42 day rally. This certainly warns that we can still see higher highs ahead from here. It will take a closing below 23506 to signal a decline is unfolding. This market is trading above our normal trading envelope which resides at 23549 suggesting it is strong and still in a breakout position. Moreover, this market is quite strong for now trading above all 8 technical support levels. Additionally, this market is very strong while our projected overhead resistance stands at 24687 and 24813.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Noticeably, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Focusing on our perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bullish currently with underlying support beginning at 23557 and overhead resistance forming above at 23845. The market is trading closer to the resistance level at this time.
On the weekly level, the last important high was established the week of April 8th at 24488, which was up 8 weeks from the low made back during the week of February 12th. So far, this week is trading within last week's range of 24488 to 23217. Nevertheless, the market is still trading downward more toward support than resistance. A closing beneath last week's low would be a technical signal for a correction to retest support.
When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 24488 made 0 week ago. This market has made a new historical high this past week reaching 24488. Here the market is trading weak gravitating more toward support than resistance. We have technical support lying at 23792 which we are currently trading below implying the market is very weak. This infers that this level will now be resistance. Our Major Channel Support lies at 21446 and a break of that level would be a bearish indication for this market.
Right now, the market is above momentum on our weekly models hinting this is still bullish for now as well as trend, long-term trend, and cyclical strength. Looking at this from a wider perspective, this market has been trading up for the past 3 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 16 months since the low established back in November 2022.
Critical support still underlies this market at 19860 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading above last month's high showing some strength.
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DiscoverGold
2 weeks ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | April 13, 2024
• Following futures positions of non-commercials are as of April 9, 2024.
Gold: Currently net long 202.4k, down 4.8k.
After just about going parabolic since early March when gold broke out of $2,080s, there were signs this week that the current rally has come too far, too fast. A breather is due and should be healthy. This week, the metal ticked $2,449 intraday Friday but only to end the session at $2,374/ounce, still up 1.2 percent for the week.
Gold bugs need to pay attention to this week’s candle with a very long upper shadow. This has appeared after a vicious rally. Last October, gold bottomed at $1,824.
At some point, breakout retest at $2,080s will occur. But before that happens, gold bugs will probably try to defend nearest support at $2,240s.
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2 weeks ago
Gold Record High of 2,431 Hit Before Retracing: What’s Next?
By: Bruce Powers | April 12, 2024
• Gold soared to a new record high of 2,431 before facing resistance, potentially marking a temporary top. Support near the 8-Day MA and Fibonacci levels will be crucial.
The runaway advance in gold headed to a new record high of 2,431 before resistance kicked in and turned the trend back down on an intraday basis. It looks like today could be the top for now. Today’s high exceeded the top of a Fibonacci confluence zone with a high of 2,422.
Support was subsequently seen near the 8-Day MA with a low of 2,334, at the time of this writing. In addition to the higher Fibonacci levels being reached a large ABCD pattern completed during today’s advance at 2,386.
Weak Close is Likely Clue for a Deeper Retracement
Gold is set to close weak, not only on the daily chart, but also on a weekly basis. Unless there is a rally prior to today’s close, gold will end the week with a bearish shooting star candlestick pattern. A weekly bearish signal will subsequently be given on a drop below this week’s low of 2,303. If hit, the short-term 8-Day MA will have already been broken.
Initial Retracement Levels
If a bearish retracement does trigger support might first be seen around the 38.2% Fibonacci retracement at 2,282. Also, the 50% retracement is at 2,256. However, since gold would be coming off a very aggressive rally, having risen as much as 22.5% from the February swing low of 1,984, a rapid recovery from a retracement may not come quickly.
Notice that the relative strength index (RSI) momentum oscillator has formed a double top and is fast turning back down from overbought conditions. The RSI has been the most overbought recently since the 2020 swing high.
Correction Could See Test of 20-Day MA
When considering the moving averages, a decline to test support around the 20-Day MA would not be surprising once the 8-Day line fails. It is currently at 2,249. Gold rose away from the 20-Day line prior to the symmetrical triangle breakout on February 29. Since then, there has not been a test of support at the line.
That means that once it is approached again, there is a good chance it will be tested. Today’s price action does not change the long-term bullish outlook for gold given its recent breakout from a multi-year basing pattern. As with all assets, profit taking eventually takes hold, weakening short-term demand and leading to a retracement.
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2 weeks ago
Gold into the April/May Target
By: Marty Armstrong | April 12, 2024
Gold has been primarily rising since the April 1st Israeli attack on Iran. Everyone is waiting for retaliation from Iran with the expectation that this will lead to a Middle East War. We still see that the target for April should produce an ideal high intraday and perhaps fall back to retest support for the ECM on May 7th. The primary threshold of resistance stands at the 2453.88 area, and we need to see a weekly closing above this level to imply a further ahead. An April high on a blow-off rally has resistance at 2627.39, 2822.79, and 2839.70. However, that does not appear likely just yet.
Caution is needed now, for this is often when people rush in to buy the high after a 7-month strong rally. Pay attention to the Daily and Weekly arrays at this time. Projections in price are NOT infallible. What tends to be more reliable is always the timing targets. Here, you can see that the top of this breakout channel stands at this 2453 zone. This indicated that the market is not running away at this time and has been trading within expected parameters. Also, look at the stochastic. It is at the top rather than the bottom, also suggesting that we are in a near-term topping-out pattern.
The FALSE MOVE appears to be shaping up. The market has sucked in a lot of people, and they expect it to just blast off. This is how a market will trap everyone. We do NOT want a high on May 7th, and April has been the target for the entire year. Let's see if we now get the FALSE MOVE after this high and then set the stage for the real rally with war.
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DiscoverGold
2 weeks ago
Gold Resistance at Fibonacci Confluence, Bullish Momentum Persists
By: Bruce Powers | April 11, 2024
• Gold faces resistance but demand remains strong. Breakout above 2,365 could signal continued advance to higher targets.
Gold continues to press up into a resistance zone that has stalled the ascent since Monday. Support for the sharp rally is around the 8-Day MA at 2,322. It remains the most sensitive level to watch for a sign of a change. A decisive drop below the line could lead to a deeper retracement. Today’s low of 2,326 and yesterday’s low of 2,319 are other nearby price levels to watch.
Fibonacci Confluence Zone Marks Resistance
There are four Fibonacci levels that create the current resistance zone. They mark a potentially formidable supply area that may lead to a turn down in price prior or a move to new trend highs. A drop below today’s low provides the first sign of weakening. Weakness will then be further indicated on moves below 2,322 and 2,319. A daily close below 2,319 will confirm a pullback. Nevertheless, given the strong rally a pullback may not last long. It will leave clues as to remaining bullish demand.
Decisive Breakout Above 2,365 Triggers Bullish Continuation
Moreover, the Fibonacci confluence resistance zone marks a key pivot that gold may break through before a pullback. A decisive breakout above this week’s trend high at 2,365 will be bullish and could lead to the price of gold continuing to advance to the next higher target zones. It would mark a breakout from a key pivot zone.
At the time of this writing gold remains strong and is trading near the highs of the day and above yesterday’s high of 2,360. If it stays strong into the close the day may end at a new record high daily closing price. Also, notice that much of the trading for the past several days recognized support above the two trendlines that cross around 2,323. Each is a top line of a rising parallel trend channel.
New High Targets Start at 2,386
The first new high target completes a rising ABCD pattern with the CD leg extended by 127.2% of the AB leg. It is at 2,386. That target is followed by several higher Fibonacci targets that cover a range from around 2,404 to 2,422. Unless there is a sharp drop on Friday, gold is set to close strong for the week and near the highs. If it occurs, it suggests that buyers remain in charge, and they may stay in charge heading into next week.
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2 weeks ago
Gold Corrections After Major Breakouts
By: Jordan Roy-Byrne | April 11, 2024
Gold has reached the first of a handful of measured upside targets at $2350.
It has another measured upside target of $2350 and the cup and handle targets of roughly $3000 and $4000.
Many observers will naturally worry about the next correction after unexpected and sudden strength. It is almost a knee-jerk reaction after many fits and starts in recent years.
A review of history helps us to understand that post-breakout corrections in Gold are usually minor.
Let’s examine how Gold performed and corrected after similar major breakouts to new all-time highs. We use the 50-day, 100-day, and 150-day moving averages as support levels.
After President Nixon ended the Gold Standard, the price of Gold climbed from $35/oz in 1971 to nearly $200/oz at the end of 1974.
Gold enjoyed three strong legs higher and a fourth that was not as strong—during those three legs higher, Gold never lost its 50-day moving average.
Gold surged from $35 in 1971 to $125 in 1973, with only one 13% decline and single test of the 200-day moving average in between.
In the second half of 1978, Gold broke out to a new all-time high but quickly retested the breakout successfully.
After the successful retest in 1978, Gold had one pullback to its 100-day moving average in 1979 and remained above its 50-day moving average until its secular peak in January 1980.
The 2005 breakout was significant because although Gold did not break to a new all-time high, it broke a 23-year sideways range to a slight downtrend. It was the first time Gold had traded at $500 since the early 1980s.
After Gold broke out in September 2005, it carried to above $700 without even testing its 100-day moving average. (The 2007 breakout was similar).
The 2009 breakout to a new all-time high led to a strong but steady advance.
After the initial breakout move, Gold would test its 150-day moving average (black) four times over the next 12 months. Gold had slowed down after gaining 70% over the previous 13 months.
We can draw two conclusions from this analysis of history.
The first is that the corrections are minor unless Gold made a huge move in the previous year.
Gold, before its 20% snapback retest in late 1978, had rebounded 135% in the preceding two years. In 2010, Gold tested the 150-day moving average three different times. Those tests were preceded by a 70% rebound in 13 months.
The second conclusion is that when Gold moves higher impulsively, it tends to hold above its 50-day moving average.
Gold closed Wednesday near $2350. It is only 12% above the major breakout line, so there is no need to worry about a significant correction.
However, Gold is stretched above its 50-day moving average, and Silver now faces stiff resistance at $28-$29. It is reasonable for things to cool down and for Gold to test its 50-day moving average.
Nevertheless, Gold is only weeks past its most significant breakout in 50 years. We should expect gold stocks, especially junior gold stocks and silver stocks, to continue to outperform Gold over the next year or two.
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2 weeks ago
Gold Sellers Take Charge for the Day
By: Bruce Powers | April 10, 2024
• A deeper pullback seems likely with the 8-Day MA at 2,319 showing near-term support.
Gold triggers a short-term bearish signal on a drop below yesterday’s low of 2,337. Also, it is on track to close below that level further confirming weakness and increasing the chance for a deeper pullback. As of this week’s new record high of 2,365, gold was up by 381 points or 19.2% from the February 14 swing low at 1,984. It is overdue for a retracement, even if it is short and shallow.
The relative strength index (RSI) may be reflecting a similar sentiment. Notice there is a double top present in the RSI, and it has risen to its highest reading since the peak in August 2020.
Weekly Trend Intact Above 2,228 Support
If a deeper retracement does come then last week’s low of 2,228 is going to be a key price level to watch for support, or higher. It is part of the price structure of the weekly trend. On the daily chart you can see how the 8-Day MA was tested as support last week and price was quickly rejected to the upside thereby confirming strong support.
Therefore, it could be an area of support again or mark a clean pivot towards lower price levels. Below the 8-Day line lies the 38.2% Fibonacci retracement at 2,282 and the 50% retracement at 2,256. The near-term uptrend line is also associated with those price areas but that depends on when the line is reached.
20-Day MA at 2,230 Key Support
A more significant price zone is represented by the 20-Day MA, now at 2,230. It helps determine the quality of the near-term trend. If gold stays above that line, strong upward momentum as seen recently may return. It usually is a more reliable line to gauge the market than the trendline. Gold remains in a near-term bullish posture if it stays above the 20-Day MA. Of course, this is relative to one’s time frame that is being used to engage the market.
Further Weakness Sets Up Bearish Weekly
Currently, the weekly chart shows weakness if it closed today. A bearish candle in the weekly chart would further point to a likely pullback before higher prices. In other words, where gold closes within the week’s trading range should provide clues as to whether it pulls back or continues to strengthen heading into next week.
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2 weeks ago
Gold New Record High but Faces Potential Resistance
By: Bruce Powers | April 9, 2024
• Gold reached a new record high but faces potential resistance at a Fibonacci confluence zone, increasing chance of a retracement.
Gold looks to have stalled on Tuesday, following a new record high of 2,365 reached earlier in the session. It hit a potential resistance zone yesterday, based on Fibonacci confluence. The confluence zone shown on the chart is confirmed by more Fibonacci levels than any previously identified resistance zone since the rally began.
That is, since gold broke out of a symmetrical triangle consolidation pattern on February 29. In other words, gold is at the greatest risk of a retracement since the breakout. When more indicators identify a similar price zone the potential significance of that price zone increases. In addition, it may end the day with a bearish shooting star candlestick pattern.
Move Above 2,365, Says Rally is Not Over Yet
Nevertheless, if a decisive rally above today’s high of 2,365 triggers, higher prices will be in sight. The next higher price targets are at 2,386, followed by a Fibonacci confluence zone from around 2,404 to 2,421. The first level completes the target from a large rising ABCD pattern that is extended by the 127.2% Fibonacci ratio. It is interesting to note that there is a potential double top in the relative strength indicator (RSI) momentum oscillator. In addition, the oscillator is the most overbought since the summer of 2020.
8-Day Moving Average First Support Zone
If a pullback is in the plans before a new record high, then the first confirmation of weakness should be seen on a drop below today’s low of 2,337. There waw a quick pullback last week, but gold quickly bounced off support around the blue 8-Day MA. Certainly, it could do so again.
Currently, the 8-Day line is at 2,297. The 8-Day MA has done a good job of reflecting dynamic support for the current sharp rally. Nevertheless, given the aggressive move seen in the rally, a test of support around the 20-Day MA would not be a surprise. It is currently at 2,221. Or the uptrend line between the two moving averages could see support.
Following a correction gold is expected to continue to strengthen. It recently broke out of a three and a half year basing period and strength was confirmed with a new high monthly close. This means that the current uptrend is still in its early stages.
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3 weeks ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | April 6, 2024
NY Gold Futures closed today at 23454 and is trading up about 13% for the year from last year's settlement of 20718. Up to this moment in time, this market has been rising for 5 months going into April suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low. As we stand right now, this market has made a new high exceeding the previous month's high reaching thus far 23500 while it has not broken last month's low so far of 20470. Nevertheless, this market is still trading above last month's high of 22569.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Distinctly, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
The perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bullish currently with underlying support beginning at 23019.
On the weekly level, the last important high was established the week of April 1st at 23500, which was up 7 weeks from the low made back during the week of February 12th. So far, this week is trading within last week's range of 23500 to 22491. Nevertheless, the market is still trading upward more toward resistance than support. A closing beneath last week's low would be a technical signal for a correction to retest support.
When we look deeply into the underlying tone of this immediate market, we see it is currently still in a semi neutral posture despite declining from the previous high at 23500 made 0 week ago. This market has made a new historical high this past week reaching 23500. Here the market is trading positive gravitating more toward resistance than support. We have technical support lying at 22800 which we are still currently trading above for now.
Right now, the market is above momentum on our weekly models hinting this is still bullish for now as well as trend, long-term trend, and cyclical strength. Looking at this from a wider perspective, this market has been trading up for the past 7 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 16 months since the low established back in November 2022.
Critical support still underlies this market at 19860 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading above last month's high showing some strength.
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DiscoverGold
3 weeks ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | April 6, 2024
• Following futures positions of non-commercials are as of April 2, 2024.
Gold: Currently net long 207.3k, up 8k.
Gold bottomed at $1,824 last October. Friday, it ticked $2,350 intraday with a close of $2,345/oz – both new highs.
The rally shifted into a higher gear after the metal broke out of $2,080s, which was touched the first time in August 2020, early last month. At some point, breakout retest will occur. But the way the rally has unfolded, there is support before that happens, with the nearest at $2,240s.
Amidst this, non-commercials, who have been adding to net longs the last several weeks, could be tempted to show some aggression. If this scenario pans out, gold bears will be forced to wait before the overbought condition the metal is in gets unwound. The daily RSI closed this week at 82.7 and the weekly at 76.5.
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DiscoverGold
3 weeks ago
Gold Surge to New Record Highs
By: Bruce Powers | April 5, 2024
• Gold turns back up following earlier weakness on Friday, subsequently reaching new record highs.
Gold turns back up and reaches new record highs following a pullback earlier in Friday’s session. The initial pullback provided a weakening signal on a break below yesterday’s low of 2,280 before buyers took back control to drive prices to new highs. Gold continues to trade near the highs of the day and is on track to close at a new record closing high. At the time of this writing the high of the day was 2,230.
Bull Wedge Target Complete
Today’s advance reached the target from the bullish wedge breakout at 2,320. At that point gold entered a resistance zone that also includes two trendlines, each is a top channel line of a different rising parallel trend channel. So, there are two trendlines and the target from the wedge pattern culminating in the 2,320 to the 2,330-price zone, approximately.
Maybe gold busts right through the zone and keeps rising. However, it also increases the chance that gold is close to at least a temporary high. If weakness follows today’s high, then there is a chance that this resistance zone is stopping the ascent for now.
New Highs Next Week Could See Gold at 2,348
Also, a decisive breakout above today’s high and a continuation higher has gold possibly rising to the next higher target zone. That is at the confluence of several Fibonacci extension levels that identify a price range from 2,348 to 2,355. The range includes the 161.8% Fibonacci extension of the retracement from the full downswing that occurred from the March 2022 swing high, at 2,352.
Overdue for a Retracement, Yet Remains Strong
There is a solid argument that gold is extended and overdue for a retracement, yet it keeps on climbing. It is set to close strong for the week, near the highs, further confirming the strength of a long-term base breakout that triggered last month. It was a three-and-a-half-year base where gold traded within a large relatively sideways price range.
The close for the month was the highest monthly closing price ever. Several earlier attempts had failed to follow through. Certainly, the current breakout is showing no signs of failure so far. However, as noted above, it is in a decision zone that could lead to a pullback. It could get tricky though as a drop below today’s low of 2,268 would be needed for a weakening signal on the daily time frame.
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