Gold Daily Chart
Gold Weekly Chart
It's really getting
interesting in the goldmarket. The big question is: "Will Gold break
through the US$1000 level and advanced to new all time highs or will it once
again fail while trying?" To be honest: I am still quite sceptic at the
moment. I expect another sell off, before Gold can run to new highs, but
let's have look at the charts first.
Three weeks ago Gold could not
conquer the US$950-957 level. After a few unsuccessful attempts a quick sell
off pushed the price down to US$925. But from here Gold showed incredible
strength again and within just a few days it went up to even US$970. This
last Friday then Gold dropped after a volatile session down to US$954 with
nearly no changes compared to the week before. Although it is still summer
the volatility was rising strongly last week. It seems something will happen
soon.
The technical picture still
looks very positive. Gold is building up more and more pressure to break out
of the triangle & through US$ 1.000. The rising 50d MA (US$943,26) and
the 200d MA are moving up parallel. All trendlines are in place and in the
last month every pull back was bought immediatley.
Unfortunately the little
double top at US$ 970 (Tuesday & Thursday last week) as well as the big
distance to the rising 200d MA (US$887,35) reminding us to stay alert. Also
the upper Bollinger Band (US$971,55) is the next resistance. And most
important the intraday-reversal in the Dollar on Friday could be the start of
a suprising Dollar Rally.
So far the correction since
the all time high in March 2008 (US$1.037) is still in play. To end the
correction a sustainable move above of the US$1.000 level is necessary.
Shortterm another attempt up
to US$970-990 seems possible. But for that an immediate renewed dollar
weakness will be necessary. If the August monthly close is above US$960 it is
highly likely that we see the breakout to new alltime highs very soon.
On the other hand Gold should
not fall below US$944 anymore otherwise we shall witness another sell off
down to the at least the US$920-900 level.
The long term technical
& fundamental perspective for gold is still super bullish. The next price targets are the Fibonacci?Extensions
of the complete correction since March 2008 at US$1.250 and U$1.600.
The DowJones/Gold ratio is now
at 9.80. The world wide stock market rally should have reached its final
stadium. At the end of August or the beginning of September the bears will be
back. In 2001 the DAX recovered within 6 month from 3.539 up to 5.467 points
and then dropped down to 2.188 points within the next 12 months! We have
witnessed very similar price action during this spring & summer so
far....
Long term I expect the price
of gold moving towards parity to the Dow Jones (=1:1). The next primary
cyclical change therefore is still years away. This means we are in a long
term bull market in gold (and also commodities) and in a secular bear market
in most of the stock markets.
Gold in EUR (one ounce =
672,47€)
Gold in Euro - Daily Chart
Gold in Euro - Weekly Chart
As well in EUR Gold is moving
slowly but surely higher.
The rising 200d MA (662€) has
been tested twice in July and is still an important support. If that support
fails we will see much lower prices. But from a technical perspective this is
pretty unlikely at the moment.
Instead after getting back
above the falling 50d MA (670€) Gold should reach the 700€ level soon. Both
Bollinger Bands were contracting during July down to a range of less than 18€
which indicates that now a bullish breakout is next.
As an EUR Investor the price
of gold calculated in EUR is far more important for you than in US$. Don´t
fool yourself. From a longerterm perspective Gold is still a very good buy at
or below 675€ an ounce.
Gold COT Data
The commercial shortposition
is again at frightening highs! This was neither 2005 nor 2007 the case before
the big rallies in the goldmarket started. The commercials are more contracts
short than at the end of February 2009. At that time Gold dropped from US$990
down to US$863.
Of course one can argue that
the Commercials are short since 2001 and from that perspective they were not
"right" the last eight years. But they always build up their
position in rising prices and they covered them not before a dramatic panic
driven selloff. And they surely earned a lot of money by doing so.
I still believe that a new
rally in the price of gold can only start, if the commercials reduce their
short positions to below 100.000 contracts. Below 900US$ the Commercials
should cover more of their positions. If we see a last sell off down to
US$880-845 to get rid off the weak hands the COT data should look very
positive again.
18.04.2009 = -153.419 (PoG Low
of the day = US$ 885)
19.05.2009 = -183.065 (PoG Low of the day = US$ 920)
26.05.2009 = -208.136 (PoG Low of the day = US$ 939)
02.06.2009 = -226.521 (PoG Low of the day = US$ 970)
23.06.2009 = -194.430 (PoG Low of the day = US$ 913)
14.07.2009 = -182.287 (PoG Low of the day = US$ 917)
21.07.2009 = -204.226 (PoG Low of the day = US$ 944)
28.07.2009 = -202.521 (PoG Low of the day = US$ 934)
04.08.2009 = -228.193 (PoG Low of the day = US$ 950)
Gold Seasonality
August is a Pivot month.
Normally this month brings the decision about what's going in the market for
the next 6 to 9 months. Normally starting around August the price of gold
rallies until the next spring. Therefore the seasonality perspective supports
higher prices in the weeks & months ahead.
Gold Sentiment
Most of the time big rallies
and new bull markets are born in a panic sentiment after a strong sell-off
(e.g. DOW in March). At the moment most of the market commentators and the
"gurus" expect the breakout very soon. To me the sentiment feels
way too positive and I am not planning to be moving with the crowd.
Gold mining stocks analysis
Goldbugs Index USD (366,27
Points) - Daily Chart
Weekly Chart
Parallel with the DOW, DAX,
most of the stock markets & Gold, the HUI gold mining stocks went up as
well during the last couple of weeks.
So far at 380 points the rally
ended last Tuesday. Since then the HUI is slowly moving down. A failure of
support around 360-365 would be a sell signal.
Until now the buy signal
created by the MACD in early July is still in play. The upper Bollinger Band
(US$383,95) makes higher prices in the coming week possible. The flat 50d MA
(351,56) and the rising 200d MA Tagelinie (297,32) are running parallel like
they do on the gold chart. Everything looks nice.
But the HUI did not confirm
the last high in the Goldmarket on Thursday which is a clear warning sign.
Most of the time the gold mining stocks are running ahead of gold itself.
As well I have to remember you
again that gold mining stocks are moving parallel with the broad stock
market. If we see a strong sell off in the stock market this autumn the HUI
will be beaten down too. But in that case we will have a great buying
opportunity.
Conclusion
The next weeks will be very
interesting. There are a lot of technical evidence for the final breakout to
the upside very soon. But if the long term bear market in stocks shows up
again Gold will be hit as well. I therefore recommend to watch the charts
very carefully.
A rise above the US$ 990-1000
level confirms the seasonal pattern. Then we should see the next leg of this
gold bull market and prices around US$1.500 in spring 2010.
A pull back below US$940
indicates another wave of correction down to at least US$900-920 or even
US$880-845. This could last even until early October before gold might be
ready to challenge the 1.000 level again. By then (with a better COT picture)
I expect Gold to be finally successful.
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