Gold Spotprice Analysis
Gold in USD (one ounce =
US$1.255,70)
·
Last monday Gold
reached a new alltimehigh around US$1.265. The same day just a couple of
hours later the price plunged US$35. It reached a bottom around US$1.225 last
wednesday. From here it went straight up again to close last friday at
US$1.255. Finally a week without change. The rising triangle has not yet been
broken but the lower trendline was successful tested for support.
·
These volatile last
trading days created a so called Doji candlestick pattern on the weekly
chart. Opening and closing price are very close. A Doji represents a market
in which bulls and bears are balanced. In an uptrend it can be a sign of a
trend reversal since the bulls have lost control of the market, although it
doesn´t mean that the bears are already in charge. A doji is a sign of
indecision, uncertainty and change of mood .
·
Technically this is
a clear warning sign. As well the sideways moving Bollinger Bands (upper band
at US$1.257,50) are getting closer together. On top the rising wedge on the
weekly chart. This indicates a big move to come.
·
On the positive
side we find the parallel increasing 50d-MovingAverage (US$1.204,75) and the
200d Moving Average (US$1.125,25) as well as the uptrend since the lows in
mid of may around US$ 1.165. The RSI-Indicator on the daily chart is not
overbought and has generally much more room to go up.
·
All in all a mixed
shortterm picture which favors a bigger correction soon to come. If gold does
not manage to break out above US$1.265 quickly a set back down to at least
US$1.170 to US$1.190 should follow.
·
The medium-
and longterm picture is still very bullish. My next price target is
the Fibonacchi - Extension (261,8% of the last big correction) at US$1.600.
This might be possible until end of this year or spring 2011.
·
The DowJones/Gold
Ratio is currently at 8.08 and seems to be on the way back to the lows from
spring 2009 around 6,86.
·
Long term I
expect the price of gold moving towards parity to the Dow Jones (=1:1). The next primary cyclical change is still years away.
This means we are still in a long term bull market in gold (and also
commodities) and in a secular bear market in stocks.
·
This chart gives
you a good idea about the big picture we are in and shows the huge potential
for precious metals in the future.
Gold in EUR (one ounce = 1015€)
·
€-Gold did not move
at all during last week. But we can find lots of negative divergences in
various indicators as well as the huge gap with the 50d-MA (959€) and
especially the 200d-MA (817€). The new alltime high in early june was not
confirmed by RSI and MACD. Normally these kind of parabolic moves (200€ in
less than 2 months) will be corrected via time and price.
·
In the current
worldwide currency crisis everything is possible of course but I would not
buy at these lofty price levels. Instead it´s time to patiently wait and hope
for lower prices during summer.
Goldbugs Index USD (492,93 points)
·
The Goldminingindex
HUI did not change during last week and is still moving in a big sideways
pattern between 375 and 500 points.
·
In contrast to the
general market the HUI could hold quite well during last week´s selloff in
Dow, S&P etc.... Now we have to see if the goldminers manage to breakout
to the upside or if the strong resistance around 500 points forces another
selloff.
·
The upper Bollinger
Band (493,89) clearly limits higher prices at the moment. A move down below
480 points could trigger a fast correction.
·
To summarize
there is no reason to buy goldstocks at current levels. Instead you should
make sure that you have tight stopps in place since the sector is famous for
its nasty and heavy selloffs.
Gold COT Data
- The
commercials increased their short position for another 10.000 contracts
and approaching levels last seen in december 2009 before gold reacted
heavily. This is a clear warning signal.
04/18/2009 = -153.419 ( PoG
Low of the day = US$885 )
12/01/2009 = -308.231 ( PoG Low of the day = US$1.190 )
05/11/2009 = -282.644 ( PoG Low of the day = US$1.201 )
06/15/2009 = -278.944 ( PoG Low of the day = US$1.220 )
06/22/2009 = -288.916 ( PoG Low of the day = US$1.232 )
Gold Seasonality
- Gold has a
strong seasonality. During june, july and august the price normally
moves down or sideways while september is one of the strongest month in
the year. Therefore we should not be suprised by a typically shakeout of
the weak hands during summer.
Gold Sentiment
Gold is not a contrarian
investment anymore. This makes the sentiment analysis more complex and
difficult. But last week a very big german newspaper "Die
Süddeutsche" dedicated its famous page 3 to gold. This reflect a high
level of optimism and is usually a contrarian signal.
Conclusion
- In the
medium term Gold should be on the way to my next price target around
US$1.600. But right before those big moves there has always been a nasty
setback in july and/or august to shake out the weak hands.
- I am
expecting a decision in favor of the bears already next week and the start
of a typical summer correction. This would be confirmed with a daily
close below US1.240.
