Entry point for gold is near

October 25, 201219 Comments

I’ve been talking about gold and silver on this blog a lot lately.  It is normally not my intention to focus so much time on one sector. But, the trading patterns for gold have been pretty predictable lately, so gold has been on my radar.

On that note, if you’ve followed my comments here, or in any of the other media I’m involved with (BNN, Investors Digest, Moneyletter), you know that I’ve been looking for a re-entry point at or below $1700. I’m looking at about $1680 as an ideal point of support – but it could be anywhere near or above that level. The stochastic momentum oscillator, which has been a great indicator for gold’s recent action, is well into oversold territory. We could see a buy signal come through for gold at any point now — perhaps today or over the next few days. Look for the “hook” and crossover of the faster %k line as a potential entry signal.

Silver, too, looks interesting. Technical support lies anywhere from $29 to $31. Stochastics is on the verge of signaling for that commodity as well. Both silver and gold will enter into a seasonal period of strength in November –so the ducks are lining up. To me, this looks like it may be an opportunity to buy gold and/or silver. I expect to re-enter the trade very shortly.

 

As an aside – I continue to encourage readers of this blog to post comments regarding the topics covered, and to offer suggestions for my weekly sector coverage. If you are new to this blog, I try to cover the broader markets early in the week (usually Monday’s) and then I like to dig into a sector of interest later in the week (usually Thursday or Friday). I’m interested in hearing what readers would like to see covered for my end-of-week sector coverage.

Thanks for reading my blog, and happy trading.

19 Comments

  • Hi Kieth,

    After you re-enter the gold trade. What is the upside you are looking for? Back to 1800 or beyond that this time? Keep up the good work.

    Thanks
    Parm

    Reply
    • Thanks Parm
      I’m looking at $1800 again, and then will watch it carefully for any sign of weakness. It could break out–but thats to be seen. I will hold a tight mental stop at that target.

      Reply
  • Hey Keith: Hopefully future will confirm your blog entry on gold was timely. I really like the level of detail you are providing and being so transparent/timely about your intentions. Gold equities do seem to present more strength compared to bullion. Do you share my opinion and, if so, will it slow down after the earnings come in shortly.

    Reply
    • thanks Khokon
      Gold equities can provide some upside “leverage” so to speak, but the purest way to play is via bullion–BTW, I am not into the trade yet–waiting for the stochastics “hook”

      Reply
  • Keith – Thank you for your insight, I really enjoy your blog. When you do decide to re-enter into gold how will you play it? What stocks/funds would you suggest your viewers to look into a little further? Thanks again.

    Reply
    • i tend to buy bullion ETF’s–I have covered them in past Investors Digest articles and this blog–they are all the same–GLD, IAU on the US exchanges, CGL, HUG and others on the TSX for $ hedgeed versions.

      Reply
  • Hi Kieth.

    Until I read your books, technical analysis looked like a bunch of voodoo to me. I have read both of them cover-to-cover several times now.
    I have been reading this great blog and your Investor’s Digest articles for the last year or so, and then watching events unfold in the markets. I think that I am starting to get a handle on all of this.
    I just wanted to say thank-you.

    Reply
    • Dan – that is so nice of you to say this–thanks very much. If you have an account on Amazon or Indigo–by all means please share that view–it never husts for me to have endorsements on the booksellers lists.
      Thanks again–I’ll keep trying to provide good, usable info..

      Reply
  • Great blog and timely discussion. Here is my $.02

    Gold Stock are outperforming bullion for the first time years, I find the stocks lead the commodity, so this is a bullish sign that bullion will eventually break out. At this time I am playing both, the leading stocks are AEM and SLW.

    I think it is unwise to trade bullion and incur capital gains taxes, its in a bull market and should be bought on weakness and held, avoid the capital gains and enjoy the long term gains.

    Reply
  • “Look for the “hook” and crossover of the faster %k line as a potential entry signal” – Has the hook formed – the fast and slow stochastics both seemed to trend in the right direction – what do think? Is the rest dependent on the greenback.

    Reply
  • Hi Keith,

    Regarding gold, would you say the stochastics signal was a false one. I remember you mentioning the 1680 support- if this is broken do you see a test of the 200 day MA or further down to prior resistance (1630s)?

    Thanks for a wonderful blog- I appreciate the details you give with your trades!

    Cheers,
    Margaret

    Reply
    • Thanks Margaret–yes, it was a false signal! $1680 support is being penetrated as I write. If it stays below $1680 for a few days, I’ll re-state my view on gold.

      Reply
  • Keith I truly enjoy reading your blog. It is very interesting. Could you let me know your opinion on silver after the latest selloff. Is it a possible re-entry point pretty soon. I look foward to your response.

    All the best
    Kevin

    Reply
    • Silver, like gold, is setting up as a buy right now. Seasonally it can be good from November to mid-winter. I’d leg in a bit at a time. I am long gold now and still may buy more in a similar discipline.

      Reply
  • Hello Keith,

    I was interested in the gold miner etfs for a gold play, ie. gdx. Are gold miners starting to get “set up” technically for November and winter months?
    Thanks for your work on blog Keith.

    Neil

    Reply
    • Neil–I do like the look of the miner charts-they look to be setting up nicely-however, I will disclose that I am strictly playing the bullion right now. The reason being is because of things like last weeks surprise report/guidance from Barrick. I find that the bullion is a pure way to play the trade without potential individual company risks coming into the picture. Having said that, this discrepency can sometimes work in your favor, rather than against you – so buy if you have done your fundamental notes on the top holdings in your chosen ETF.

      Reply

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