GOLD UPDATE

Gold appears to have completed it’s daily cycle low. It needs to rally violently to $1140 in the next couple of days or this will just be another bear market rally.

58 thoughts on “GOLD UPDATE”

  1. Alexandru Popovici

    ECB decision next week holds the key to USX’ hence to gold’s trend.

    SLP stock really doesn’t give a damn on all this bear market…
    Now It is the VERY LEADER of all US stock market, it leads some 8000 stocks ! The only stock withstanding the tide

  3. Alexandru Popovici

    welcome, Victor!
    good luck!

    for me it is clear: unless stopped-out, SLP is a long-term keeper. It is the very number 1 stock now on all Wall Street, out of some 8000 stocks.
    I will add to the current 10% position after the bear market is over but I will not part from this position even through its future consolidation period [unless stopped]

  4. mm

    Gary, if days like today can’t get miners moving, what is in store for miners when fear subsides?

    I know u think miners and gold will bottom with the market and CRB but why?

    Fear will be gone and gold is a small portion of the CRB. Oil and grains will take off to the upside when the CRB bottoms but that doesn’t mean Gold will?

    1. mike trike

      The good gold miners are near their 3 year highs still and in strong uptrends for last 2 or 3 years. I am talking about Canadian and Australian miners mainly. I am loaded with Canadian miners which bottomed 3 years ago. ABX and AEM are doing fine. GG sucks.

      Why would oil take off? There is a glut of oil. There is not a glut of gold.

      GDX and GDXJ are filled with overpriced high market cap junk. Look at quality well managed gold companies for market direction instead. Takes a bit of work though.

      1. Mark

        “Unfortunately” Mike is right!!!
        There are many miners that are in an uptrend,if I had these miners I would have lost far less money !!!!!
        I would like to underline that even the south african miners are moving up.
        The infamous DRDGOLD have broke to the upside short term,today is gaining about 10%.
        And this is NOT a good company,but it was one of the first stock to move at the beginning of the gold bull that started in 2001,it topped in 2003 and it went into the abyss since then. (it was 50 dollars in 2003,it is 2,30 today after it touched about 1,20).
        Let’s hope that history repeat and that the move in this sock is signaling something positive for the gold sector

        1. mike trike

          Mark, I have some bad performing miners as well. I think it might be time to buy Mexican miners. One that I own is Excellon, T.EXN. They came out with a news release today to update their optimization plan. What stands out to me is the plummeting cost of electricity and USD/PESO.

          PEA as at July, 2015 Jan. 14, 2016
          Description

          Energy cost per KWH $0.13 $0.06
          Foreign exchange rate
          Canadian dollar/U.S. dollar 1.25 1.43
          Peso/U.S. dollar 14.50 17.90

          “The significant reduction in energy costs in Mexico continues to be beneficial to the optimization plan and is largely a result of lower oil prices (resulting in reduced electricity tariffs) and the depreciation of the peso. With approximately 25 per cent of the company’s operating costs in 2014 composed of direct electricity expenses and 85 per cent of all operating expenditures in pesos, the improvements in these inputs are significantly beneficial to the company’s continuing operation and future operations following implementation of the optimization plan.”

          http://www.excellonresources.com/index.php/investors/news/2016/164-excellon-provides-update-on-progress-of-platosa-optimization-plan

          1. Mark

            Thank you Mike!
            I recently I have bought Integra Gold-Richmont Mines-Kaminak Gold and Lake Shore Gold.
            But probably the most amazing chart is from Northern Star Resources (NST.AX) I could not believe my eyes when I have seen it.
            It was 0.05 in 2010,from there it rose until now and today is 2.76.
            What is amazing is that it is the exact opposite of gold and miners charts .
            This add pain to the already tragic state of my investments because I was not able to choose the right stocks.
            It’s sad.

  5. Russell

    Hey Gary,

    Quick question. Or anybody else that wants to chime in. Do you ever pay attention to the Gold to Oil ratio? http://www.macrotrends.net/1380/gold-to-oil-ratio-historical-chart

    The ratio seems to have maintained a fairly linear upper and lower ranger over recent history, and is breaking that range to the higher end for the first time in our lifetimes.

    I’d love to see a post on this, and any implications it might have, if you felt it had any relevance to current markets.

  6. Alexandru Popovici

    Victor, yes, the ECB meeting announcement is on Thursday at 7:45 EST

    PS: got stopped out of SLP. Cummulated loss since the other Wednesday, JAN6, of -1.8% of total equity due to the stock pilots issued on that day. Now I am waiting 100% in cash for that ECB announcement: it will be a make or break for USX, hence for gold too.

      1. Alexandru Popovici

        nope, it is not me 🙂
        out of principle, I would not buy such a car unless I were a filthy-rich multi-milionaire, so that after having financed all charitable work I would like to I would still bear heavy loads of money so that I would say: “ok, let’s spend some money on a safer, more comfortable car too.”
        I would not buy a convertible even if filthy rich, though 🙂 🙂

        CHUY deserves attention too in the future

      2. Alexandru Popovici

        Victor, I would even not have what to do with a very fast car –> I barely reach 140 km/h even on a highway…I start feeling uncomfortable. I am just as risk adverse in trading as I am while driving ;;) and the vice versa

    1. Gary Post author

      That might still be risky. The cartel has had no trouble squashing the rally today.

      One has to wonder what it’s going to take to break the manipulation in this sector. The end of the world?

      2. Jorgy

        I’m in with a hard stop under yesterday’s low. Gold tested the 50 is behaving well and we have a holiday in the U.S. which may (or not) work to my advantage if the FED intervens.

        NY Fed President Dudley said the 2% inflation target is coming unanchored to the downside so maybe, just maybe the FED is going to interven or manipulate the price of commodities higher to stoke fears of inflation tomorrow, not the greater risk of deflation today?

        Either way, I’ve got 6% dowside risk w/ 100% upside if gold does it’s thing, the USD does it’s and stocks rip next week? 😉

  8. Bill J.

    Gary,

    could it be the margin call that trigger the Sell in miners along with general equities? Any thought or evidence?

    cheers…

    1. mike trike

      Gold and miners went down with the market in 2008 as well. The fact that gold is basically flat is a good sign IMO.

      1. Bill J.

        Sure hope that’s the case. XAU & HUi, both weekly charts don’t look great here…i would expect more selling pressure next week for gold to test 1,050 while GDX to attempt breaking $13 once again…

  9. Bill in Tokyo

    Great video. Liked your trendlines. It’s amazing to see all the touches. Almost as if a machine was moving gold about along a predetermined path! Anyways, agree this looks like a backtest of a breakout.

    But, the weekly and esp. monthly charts are all still in clear downtrends. This daily chart action is so far the same as last yrs Aug to Oct “rally”, which was a messy.

    And now seeing GDX pop ‘n drop, and close down for the day, and also GLD not spending the day impulsing higher, me has doubts. I’ll continue to say out for now. I don’t know what I need to see, but I don’t see it yet, that’s for sure.

  10. bc

    On next Monday, if gold price is keeping at MA10 or up, the rally will be confirmation. Today GDX and GDXJ is working very bad, so I believe most of people doubt the rally.

  11. Bill in Tokyo

    Short term wise – using 1 hr charts – GDX looks like the next move is up – GLD I have no idea. As noted, today GDX popped ‘n dropped, but notice that todays low did not go lower than yesterdays low. That plus the 1 hr TRIX shows me that we are bottoming here – again on a 1 hr chart. Gary’s video covered the daily breakout/backtest already.

  13. Bill J.

    And, why is VIX not getting hysterical given that equities are as low as that in Aug 2015? Anyone?

    It doesn’t make sense that the panic yardstick doesn’t really show any panicky sign at all ???

    Or is VIX about to shock the masses once again soon?

    1. Sooze

      The “market” came back from the August 2015 lows. Every cheerleader on CNBC was saying buy the dip, and they were right (if you then sold in December).

      The panic will return if the “markets” plunge below the August lows.

  14. Bill J.

    Yo Dave, looks increasingly more likely that SA is gonna test $6 and create its right inverted shoulder if the h&s bottom is for REAL ?

  15. Bill J.

    Btw, JDST had a breakout on its weekly chart to the upside…a rather tell-tale sign that more weakness is to be expected next week in miners.

      1. mike trike

        volume on DUST and JDST is kind of weak. Volume on NUGT is massive. I wouldn’t be too bearish on miners right now.

        1. Bill J.

          the scary thing to me is that VIX has not imploded much this time (not even above 30s) and SPX is already as low as Aug’s low…does it mean that the market is too complacent???

          And, if VIX were to implode soon, i think everything that can be sold will get sold like it did in 2008.

          Tough time ahead.

          1. Bill J.

            Folks, l think i get it now. VIX’s absolute level on daily chart is very confusing, but, looking at its MONTHLY chart is where the tell-tale sign could be. It just breakout as of Jan’s monthly candle on vertical resistance line from the peak in 2008!!!]

            Aug’s VIX breakout at the same vertical resistance and garnered a gain of +154% from the breakout point. Jan’s VIX breakout (as of today’s closing) has gained only +54%.

            Do we have at least another 100% to go on the VIX? A million $$$ question…

            So, the daily VIX level is fooling us here…go take a look at VIX monthly chart now!

  16. Bill J.

    And, not sure what this means, on MONTHLY XAU chart, 10 & 20D exponential MA just cut down the 100D EMA…1st time ever since year 2000.

    Though my TA is predominantly price biased, but, this pattern on the EMA doesn’t look good!

    Looking at HUI’s monthly chart, however, 10 & 20D EMA has cut down 100D-EMA since year 2013 and where it started to implode fast.

    Looking back at XAU’s history, the very last time when the 10&20D-EMA cut down its 100D-EMA was in the 1Q of 1997 and gold only bottomed then in 2001 ???. On HUI for the same period, it moved in tandem to gold’s movement.

    So, given the same scenario for XAU on the EMA movement but with HUI clearly pricing in a lot more downside since 2013 already, I really do not know how to interpret this!!!

  17. Bill J.

    Folks, l think i get it now. VIX’s absolute level on daily chart is very confusing, but, looking at its MONTHLY chart is where the tell-tale sign could be. It just breakout as of Jan’s monthly candle on vertical resistance line from the peak in 2008!!!

    Aug’s VIX breakout at the same vertical resistance and garnered a gain of +154% from the breakout point. Jan’s VIX breakout (as of today’s closing) has gained only +54%.

    Do we have at least another 100% to go on the VIX? A million $$$ question…

    So, the daily VIX level is fooling us here…go take a look at VIX monthly chart now!

  18. Bill in Tokyo

    I think that the VIX is fuzzy and over-analyzed.

    Same for COT.

    JDST on a 1 hr chart shows neg div on both the RSI(14) and MACD (I use PPO).

    Short term-wise, GDX and NUGT will go up next week, IMO. I’m using 1 hr charts to trade. The only other chart where I see anything is in the monthly, and both GDX and GLD are going down down down there.

  19. Fred The Shred

    Gold miners have been an unhappy hunting ground for investors over the past three years, but with concerns over the high values of stock markets globally, UBS suggests the sector’s appeal is growing.

    The Swiss broker believes that if the turbulence increases, gold’s role as a portfolio diversifier/tail risk hedge has potential to become increasingly relevant.

    More to the point, after the three years of retrenchment and cost-cutting the miners themselves are in a better position to take advantage, it says.

    http://www.proactiveinvestors.co.uk/companies/news/121403/worried-over-markets-try-gold-shares-suggests-ubs-121403.html

    Now that makes a change !!!

  20. zkotpen

    Jorgy,

    I like your NUGT trade a lot!

    I did not take a similar trade at the end of the day, for reasons we’ve discussed here previously: As Gary says, there is a downside risk, and I am waiting to fire only when I see the whites of their eyes 🙂

    But I like your risk/reward setup.

    Just be careful: The move up may be a bull trap — still profitable, if you run off with the cheese before the trap slams shut!

  21. Dan

    Small short the market and short silver. Mostly cash. Deflationary crash will reach a climax sometime this year, then I’ll go all in physical silver.

  22. Fred The Shred

    Personally getting long the PMs and PM Miners and keeping them, even taking the certificates from my broker for some to remove counter party risk.

  23. zkotpen

    My analysis points to a move to 1125-1136 for gold next week, possibly the final move up to complete the bear market rally/consolidation since December 3. (I would increase these targets if warranted by price action). That could propel GDX anywhere from 6-12%.

    I also think that GDX completed its own rally/consolidation on Jan 7. So the corresponding move up in miners would be a correction which, since Thursday afternoon, looks to be shaping up as a flat. A 10% move up would take it to the 14.40 area — getting into that deep 62-76% fibonacci retracement zone.

    In that scenario, gold would make one more high above 1113, but GDX would not exceed 15.01. That’s my preferred scenario at present.

    Yeah, the more I think about it, the more I like Jorgy’s NUGT entry.

  24. Frank

    Are you ready for the ugly truth? Well, after the MLK Monday holiday gold will jump up explosively, as we predict. But what will logically drive that, accompany that, and is predicted by the present entry of the stock market into wave 3 of 3 down? A major crash of 3-400 SPX points. I know this is a crazy prediction, but this sure is the time for it. Terrible Tuesday.

    1. Sooze

      That would be Terrific Tuesday if it happened.
      The “markets” need a crash to wash away the manipulation and lies.

  26. Frank

    Do you notice how on a typical day the financial channels do nothing but talk about if you should be “in” or “out”. But on a week like the past one, they don’t touch the subject, or worse, they say you should “stay the course” and hold your stocks. Do they ever say “this looks terrible. You should get the hell out right now” NO!

    And you know all their buddies are out, just waiting for the break.

  27. Bill J.

    With lots of individual miners breaking down once again, am not sure if there is a rebound next week…but the signs are pointing to more sell-off in the interim instead…

    Don’t hold your breath ?

  28. Alexandru Popovici

    we don’t know what will be; most likely ECB will extend its QE gun capacity so that indeed miners’ intermediary cycle decline will continue and gold will follow their lead into IC decline (what is now a fresh daily cycle will fail on Thursday) –> that will also be the catalyst for the much waited stock bear market rally
    But if for some reason (ECB board is filled with hawks) ECB pauses again, then …. the story will be different

  29. victor

    notice: no David Silver – nobody mentioned about oil…, could be interesting development with Iran sanctions lifted on Saturday, or maybe it’s already priced in…

  30. Tech_trac

    ” Buy the anniversary of the Hi”….was an old Wall St Saw I learned many decades ago…
    Jan 22 2015 was the hi for 2015 @ $1307..
    GDX/GDXJ still holding above its rising 200dma …
    Japanese Yen on the verge of penetrating its H&S neckline as it approaches a P&F breakout @ 86.45
    Fri’s close @ 85.47 was the highest close since Jan 2015 when AU reached its 2015 hi..
    can a run ala 2007-2011 (YEN cyclical bull mkt) be unfolding?
    will AU repeat its performance?
    Tue’s electronic slam not withstanding..

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