Goldbriefing is travelling this week and next. We'll be back in mid-October.
Tuesday, September 30, 2008
Sunday, September 21, 2008
Turnaround has begun
Gold's $70 vault on Sept. 17 served as the exclamation point marking the end of the six-month decline that began after the yellow metal peaked on March 17. It remains highly improbable, however, that gold will exceed its all-time high of $1,033.90 any time soon. The most likely scenario is a return to the bottom of the weekly channel and a slow crawl along the uptrend line until gold builds up enough momentum to surmount the considerable resistance overhead.
GOLD (daily)
Gold's great leap forward on Wednesday and Thursday ended with the yellow metal closing a little above its 200-day MA. It then began to correct the excessive exuberance on Friday, filling the gap at $850 and closing the day just above the 50-day MA. RSI has turned downward. Support lies at the Fibonacci 50% retracement level, around $843, and then at the 61.8% level, around $798.
GOLD (weekly)
Gold has broken back in spectacular fashion into its channel, ending the week a little short of the 50-week MA. MACD has finally turned upward. RSI has made a double bottom and is now bumping up against 50. Clearly, considerable resistance lies overhead.
SILVER (daily)
Silver, too, is showing remarkable strength, and has yet to completely fill its own gap below $12. RSI leaped out of its oversold zone and was repelled at 50. MACD has made a bullish crossover.
SILVER (weekly)
Silver jumped to close just beneath the now broken green uptrend line, which could offer some resistance. Next resistance is at the magenta line, around $14. Silver may find support at its 200-week MA, currently at $11.83. RSI bounced off the 30 mark.
GDX (daily)
The gold-mining ETF sprang up on extremely high volume and hit its head against resistance at the bottom rail of the blue channel. RSI is back above 50. MACD has made a bullish crossover. Further resistance is at the next blue line and the 50-day MA nearby.
GDX (weekly)
The gold-mining ETF bounced off the bottom rail of its green channel, an important long-term trend line, but was held back by its 200-week MA. GDX will likely stay in the bottom half of its channel for some time to come.
U.S. DOLLAR INDEX (daily)
The index continues its decline, closing the gap below 77.5, where previous congestion provides some support. RSI has reached 50. MACD has made a bearish crossover.
U.S. DOLLAR INDEX (weekly)
The dollar is correcting its sharp rise and may test the support formed by extending the sides of the falling wedge. RSI has been repelled at 70.
GOLD (daily)Gold's great leap forward on Wednesday and Thursday ended with the yellow metal closing a little above its 200-day MA. It then began to correct the excessive exuberance on Friday, filling the gap at $850 and closing the day just above the 50-day MA. RSI has turned downward. Support lies at the Fibonacci 50% retracement level, around $843, and then at the 61.8% level, around $798.
GOLD (weekly)Gold has broken back in spectacular fashion into its channel, ending the week a little short of the 50-week MA. MACD has finally turned upward. RSI has made a double bottom and is now bumping up against 50. Clearly, considerable resistance lies overhead.
SILVER (daily)Silver, too, is showing remarkable strength, and has yet to completely fill its own gap below $12. RSI leaped out of its oversold zone and was repelled at 50. MACD has made a bullish crossover.
SILVER (weekly)Silver jumped to close just beneath the now broken green uptrend line, which could offer some resistance. Next resistance is at the magenta line, around $14. Silver may find support at its 200-week MA, currently at $11.83. RSI bounced off the 30 mark.
GDX (daily)The gold-mining ETF sprang up on extremely high volume and hit its head against resistance at the bottom rail of the blue channel. RSI is back above 50. MACD has made a bullish crossover. Further resistance is at the next blue line and the 50-day MA nearby.
GDX (weekly)The gold-mining ETF bounced off the bottom rail of its green channel, an important long-term trend line, but was held back by its 200-week MA. GDX will likely stay in the bottom half of its channel for some time to come.
U.S. DOLLAR INDEX (daily)The index continues its decline, closing the gap below 77.5, where previous congestion provides some support. RSI has reached 50. MACD has made a bearish crossover.
U.S. DOLLAR INDEX (weekly)The dollar is correcting its sharp rise and may test the support formed by extending the sides of the falling wedge. RSI has been repelled at 70.
Monday, September 15, 2008
Dollar corrects
The U.S. dollar index has finally halted its headlong rise to extremely overbought levels, losing more than a point on Friday. Conversely, gold and silver have started to turn upward, led by GDX, the gold-mining ETF.
U.S. DOLLAR INDEX (daily)
Upside: After falling 1.24 on Friday, the index could bounce briefly before resuming its decline.
Resistance: Thursday's high at 80.38.
Downside: A correction to the dollar's steep ascent is under way. RSI is showing a bearish divergence and has fallen out of the overbought zone. MACD-Histogram is also showing a bearish divergence. MACD looks poised to make a bearish crossover.
Support: Gap and congestion area below 77.5; upper rail of green channel; 50-day MA.
Bottom line: The dollar index has a long way to fall before any support appears.
GOLD (daily)
Upside: RSI is bouncing out of its oversold zone and is showing a bullish divergence.
Resistance: Bottom rail of blue channel; round number at $800.
Downside: MACD has made a bearish crossover.
Support: Thursday's low at $739.80.
Bottom line: Gold is likely to encounter stiff resistance at the bottom rail of the blue channel, which formerly provided strong support.
SILVER (daily)
Upside: RSI is turning upward from severely oversold levels.
Resistance: Earlier low at $12.31.
Downside: MACD has made a bearish crossover.
Support: Tuesday's low around $13; this month's low at $12.31.
Bottom line: Silver, which tends to lead gold when the market reaches extremes, is struggling to recover from its lowest levels in two years.
GDX (daily)
Upside: GDX gapped up convincingly on strong volume on Friday. RSI has risen out of the oversold zone and is showing a bullish divergence, as is MACD-Histogram.
Resistance: Bottom rail of blue channel.
Downside: No clear indication.
Support: Thursday's low at $27.35.
Bottom line: GDX has probably made a bottom, although it may conceivably return to test it. It would be a bullish sign if the putative runaway gap around $29 is tested but not closed.
U.S. DOLLAR INDEX (daily)Upside: After falling 1.24 on Friday, the index could bounce briefly before resuming its decline.
Resistance: Thursday's high at 80.38.
Downside: A correction to the dollar's steep ascent is under way. RSI is showing a bearish divergence and has fallen out of the overbought zone. MACD-Histogram is also showing a bearish divergence. MACD looks poised to make a bearish crossover.
Support: Gap and congestion area below 77.5; upper rail of green channel; 50-day MA.
Bottom line: The dollar index has a long way to fall before any support appears.
GOLD (daily)Upside: RSI is bouncing out of its oversold zone and is showing a bullish divergence.
Resistance: Bottom rail of blue channel; round number at $800.
Downside: MACD has made a bearish crossover.
Support: Thursday's low at $739.80.
Bottom line: Gold is likely to encounter stiff resistance at the bottom rail of the blue channel, which formerly provided strong support.
SILVER (daily)Upside: RSI is turning upward from severely oversold levels.
Resistance: Earlier low at $12.31.
Downside: MACD has made a bearish crossover.
Support: Tuesday's low around $13; this month's low at $12.31.
Bottom line: Silver, which tends to lead gold when the market reaches extremes, is struggling to recover from its lowest levels in two years.
GDX (daily)Upside: GDX gapped up convincingly on strong volume on Friday. RSI has risen out of the oversold zone and is showing a bullish divergence, as is MACD-Histogram.
Resistance: Bottom rail of blue channel.
Downside: No clear indication.
Support: Thursday's low at $27.35.
Bottom line: GDX has probably made a bottom, although it may conceivably return to test it. It would be a bullish sign if the putative runaway gap around $29 is tested but not closed.
Thursday, September 4, 2008
Fearful symmetry
This blog's first post was on Sept. 4, 2007, exactly a year ago, the day gold broke out of its 15-month consolidation and began its rocket-propelled ascent to its all-time high of $1,033.90 in March.
Six months later, on March 10, we said:
Gold is vacillating between its Fibonacci 61.8% and 50% retracement levels. The yellow metal lies just above round-number support at $800 and the bottom of its channel. MACD is at a low unprecedented in the entire bull market since 2002.
It looks as though the bulk of the correction is done in terms of price, though not in terms of time. Gold may need to creep along the bottom of its channel for quite a while to form a base for the next rise to the top of the channel to challenge its March high.
Silver is vacillating between the magenta and green sides of a symmetrical triangle. Not far below lies the rising 200-week MA. Given the extremely low level of MACD, silver's breakout, when it comes, will probably be to the upside.
In a fearful symmetry, GDX's low today of $32.16 equals the low of August 2007 to the cent. In other words, the gold-mining ETF has completely retraced its rise from August to March.
Although it is conceivable that GDX could fall further to the important green uptrend line a little below $29, the extremely low level of MACD suggests that the bulk of the decline from the March high of $56.87 is behind us.
The U.S. dollar index has convincingly broken out above its three-year downtrend line. Although MACD may not be done rising, RSI is close to levels from which it has retreated in the past.
The buck could conceivably rise to strong resistance at its falling 200-week MA, currently at 82.82. Unless a remarkable decoupling takes place, that would be hugely bearish for gold.
Six months later, on March 10, we said:
Our indicators and, especially, our trend lines have kept us onside for virtually the entire rally, although there were a couple of weeks when its potency and longevity surprised us.A week later, gold hit its high and promptly reversed dramatically. On March 22, we wrote:
But trees don't grow to the sky, and there are signs that a significant correction is in store. Gold has not revisited its 200-day moving average since mid-August and not even its 50-day MA since mid-December. One or both of these are likely to be touched before gold is able to make serious headway into the four figures.
The bull run from last August is over. This correction could last several months, possibly more than a year.At the time, the last sentence would have been considered somewhat pessimistic, as many were predicting a retest of the high in short order. In the event, our comments look realistic, as gold sliced through its 50-week moving average and today sits at $803.20, just above critical support.
Gold is vacillating between its Fibonacci 61.8% and 50% retracement levels. The yellow metal lies just above round-number support at $800 and the bottom of its channel. MACD is at a low unprecedented in the entire bull market since 2002.It looks as though the bulk of the correction is done in terms of price, though not in terms of time. Gold may need to creep along the bottom of its channel for quite a while to form a base for the next rise to the top of the channel to challenge its March high.
Silver is vacillating between the magenta and green sides of a symmetrical triangle. Not far below lies the rising 200-week MA. Given the extremely low level of MACD, silver's breakout, when it comes, will probably be to the upside.
In a fearful symmetry, GDX's low today of $32.16 equals the low of August 2007 to the cent. In other words, the gold-mining ETF has completely retraced its rise from August to March.Although it is conceivable that GDX could fall further to the important green uptrend line a little below $29, the extremely low level of MACD suggests that the bulk of the decline from the March high of $56.87 is behind us.
The U.S. dollar index has convincingly broken out above its three-year downtrend line. Although MACD may not be done rising, RSI is close to levels from which it has retreated in the past.The buck could conceivably rise to strong resistance at its falling 200-week MA, currently at 82.82. Unless a remarkable decoupling takes place, that would be hugely bearish for gold.
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