1. Gold & Silver Update
Two weeks ago I expected only a minor setback in Gold. That was obviously
wrong. Gold came all the way down to US$1,155.80 during last Thursday. But
at least we saw a bounce from the lows which left a bull-hammer on the chart.
With the greeks clearly rejecting the bailout conditions the next couple of
days should be volatile and Gold's gap up could hold this time.
Overall I still think that the bear market is not yet over but I remain bullish
for the next 1-3 months....
As you can see on this performance chart for the last month the agriculture
sector has exploded to the upside. With these gains it's hard to imagine that
Gold is going to crash soon. Instead higher prices in Wheat, Corn and Soybeans
should translate into a higher Gold price during summer.
2. The Midas Touch Gold Model
My model switched to a bull signal three weeks ago but this signal lasted
only one week. Already on the 23rd of June the bear signal was back on. If
you want to have regular updates follow me on Facebook please.
The latest changes are a sell signal on the Gold in USD-Daily Chart and a
buy signal from the Ratio Gold/Oil.
Overall the model is in Sell/Bear Mode but Gold CoT-Report as well as Gold
Sentiment and Seasonality are supporting a summer-rally.
3. Gold Daily Chart
The bull hammer is clearly visible on the daily chart. It looks similar to
the one four weeks ago. Therefore Gold should at least be able to post a rally
towards the 50MA (US$1,189). Another short-term target could be the upper Bollinger
Band (US$1,197) or the 200MA (US$1,204). The slow stochastic indicator is clearly
oversold while the MACD sell signal looks indecisive. Overall due to the strong
seasonality, the very pessimistic sentiment and a friendly CoT-report I see
good chances for a summer-rally in the coming weeks that could take Gold towards
US$1,200 and maybe even the very strong zone of resistance around US$1,240.
Of course, as the overall bear market is still in place I would not expect
too much of Gold and this summer-rally will surely not be an easy ride. As
I have already explained the bears need a "fully staffed pain-train" again
to push Gold sustainably below $1,170 on a daily close.
Short-term traders could go long below US$1,170 (or possibly even below US$1,168
should Gold close its new gap) but placing a tight stop at US$1,155. With a
potential summer target at around US$1,240 this would give you a reasonable
risk reward of 1 to 3.5. But don't expect this to be an easy ride although
the potential for a sizable short squeeze is given at the moment. The mining
stocks looking attractive here too!
As an investor I suggest to wait for another chance to accumulate physical
Gold below $1,150 until you hold 10-20% of your net-worth in physical Gold
and Silver as an insurance.
4. Long-term personal beliefs
The return of the precious metals secular bull market is moving step by step
closer and should lead to the final parabolic phase (could start in summer
2015 or 2016 and last for 2-5 years or even longer). Before this can start
Gold will need a final selloff down to $1,050-$980. My long-term price target
for the DowJones/Gold-Ratio remains around 1:1. and 10:1 for the Gold/Silver-Ratio.
A possible long-term price target for Gold remains around US$5,000 to US$8,900
per ounce within the next 5-8 years.
Fundamentally, as soon as the current bear market is over, Gold should start
the final 3rd phase of this long-term secular bull market. 1st stage saw the
miners closing their hedge books, the 2nd stage continuously presented us news
about institutions and central banks buying or repatriating gold. The coming
3rd and finally parabolic stage will end in the distribution to small inexperienced
new traders & investors who will be subject to blind greed and frenzied
panic.
