Gold’s failure

 

I’m on BNN today at 1:00. One of the questions that I know I will get is regarding gold. Its always something people want to know about. So- I’ve taken the liberty to post the same chart that I have been posting on my blog for the better part of 3 years. Interestingly, the support/resistance lines – which I drew ages ago- have been exceedingly consistent in determining where gold will rally off of or find resistance at.

 

My comments back a couple of months ago on this blog site were that gold looked like it was at a moment of truth. That is, it was playing with technical resistance at or around the mid $1300’s. I noted that it would only be bullish if it broke that price point, and preferably blew over $1400. My other comment was that time was working against that to happen. The seasonal period for strength in gold ends in October–as I wrote in this blog in early September.

Well, gold tested and failed right at the mid-$1300 resistance line that I’ve had on this chart. As I said, amazingly consistent. BTW, the gold producers, as seen via the shares Global Gold ETF, are not looking any more bullish. That ETF has been suck in a large symmetrical triangle since early 2016. Sure, it could break out to the upside – which would imply a bullish outlook. But that would depend to a good degree on bullion’s behavior.

 

Technical support comes in at around $1175 for gold – its currently around $1300. Now that its entered into a less seasonally favourable part of the year, it just may get there ($1175) before next summer and/or float between $1175 support to $1350 resistance. I’d not especially be a bull on gold, or the gold producers right now given that potential.

 

6 Comments

  • What do you think of the U.S. Financials now that some of the earnings have been released.

    Reply
    • I like them–we own a regional bank, and like a few of the bigger banks–seasonally the come into favor around now (November, officially) and most of them have good charts, so its not a bad bet.

      Reply
  • I wonder how many people bought on the break of the trend line thinking they had punched there ticket for a gold seat, just to see it reverse at resistance? Glad I passed on that one!

    Reply
    • Ditto. I sometimes get the call right on this site, and this was one of those times!

      Reply
  • I am trading currencies and commodities with a small personal account. Since Monday, strange things happened, and I was stopped out of new positions by high volatility and noise. Today, I looked at a couple of things, and had a good look at charts of gold in both USD and CDN…. I felt inspired. I now sit on my hands and pray. The chart you present is from the ETF, and is similar in most ways. There are 3 ways this could breakout (up, down, or continue in a sideways fashion), and the apex is coming fast. Do you have comments?

    Reply
    • Louis–the updated price of gold since I wrote this blog is now right at the bottom of the bigger consolidation form that I show on the chart. Its got support at the rising neartermed trendline, and the 40 week MA. My guess is that it will hold….However…If it cracks, that would be ugly–we might see a revisit of $1120, then $1050–and then who knows what. But the line hasn’t broken yet, so I say wait – and see…

      Reply

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