weekend chart - gold

I see traders everywhere panicking. People are acting like they’ve gotten left behind. Nothing could be further from the truth.

While I’m skeptical that gold has made a final intermediate cycle low because it hasn’t dropped far enough to break the intermediate trend line yet, and the dollar should still have another leg up this month, the reality is that gold is only on day 3 of this daily cycle.

If this is a new intermediate cycle it has at least 13-16 weeks left to rally and will easily test $1400. No one has missed anything yet.

In this weekend’s report I will go over what I’m going to look for early next week to tell me if this is a new intermediate cycle, or just a very convincing fake out.

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37 thoughts on “WEEKEND CHART – Gold

  1. Gary Post author

    We caught the move out of the DCL with a position in GDXJ. We took profits this afternoon. Now we just have to see what happens Monday to tell us whether to position for a new intermediate cycle, or to stay on the sidelines and wait for one more leg down.

    1. Robert

      ? Now I’m confused. You said gold would have a DCL, rally for couple days and then drop to ICL. Now your saying it can rally 13 weeks from here towards 1400? Judging from the verbiage sounds like all bets off for the ICL and so anyone chasing should still make a profit from here. The final low is in then.

      1. Gary Post author

        “I will go over in the weekend report what I will look for early next week to tell me if this is a new intermediate cycle, or just a very convincing fakeout.”

    2. Don

      Given that GDXJ had a big gap up at the opening on Friday, you couldn’t have “caught the move out of the DCL” at a very good price. And what kind of meager profits would you have had by taking profits “this afternoon”? What was your rush to sell? That’s what is called ‘Day trading’. So, what has happened to the ‘hold it for a couple of years’ meme that your always lecturing about?

  2. Enkhee

    Hi Gary. Could dollar and gold rally together in coming weeks over brexit fear? thanks

  3. Surf City

    Gary, You are correct that the USD could surprise here as it is in the timing band to find a DCL here, likely sometime next week. This first Daily Cycle out of the May low was very bullish but that move was likely predicated that the Fed would raise rates in June. If so, I see two possibilities:

    1) The Fed surprises and actually raises rates in June and the USD takes off again.

    2) The Fed does not raise rates and the USD bounces a bit until the announcement comes out at the next FMOC meeting on June 15 and the USD quickly rolls over again and makes a lower low.

    In the meantime here is how I see Gold if this is a new Intermediate Cycle.


    1. humbled

      allow a newbie to introduce another possibility:

      3) Yellen Fed keeps rate hike option open for june or july hike, keeps dollar supported above DCL (instead of rollingover)

      Correction in gold and miners thus far are shallow by historical standards and leaves room open for further correction i.e. “double retracement” type to a lower Fibo target, if history is any guide based on fractals of 2000 & 2008 bull market launch phases.

      Yellen speech on 6 June could help validate 3) above

      1. Surf City

        Humbled, Very possible as the Fed has mostly been “jawboning” the rate increases rather than implementing them. At some point, however, they will lose credibility and the market will call their bluff.

        Regarding the 2008 Bull, take a look at my 3rd chart in this post and show me where there was a yearly cycle low, let alone, a bloodbath phase. All I show at 6 months is a 38% fib retrace and the 150ema on the daily providing support at the first ICL. Compare to the low this week and it looks very similar to me. Just sayin…. 😉


    2. goldilocks

      I agree with you; the Fed may very well determine the next intermediate direction (and it may be short lived) in the dollar and gold. ( At some point, I think gold will ignore the dollar strength and begin it’s multi-year journey up, again.) Just my opinion.

      1. Surf City

        Goldilocks, I also agree that their will be a period where the USD and Gold will rise together. There is an inverse correlation but also periods where it takes a back seat so to speak.

  4. daummer

    Hey Gary, I’m a bit confused. You had stated with strong conviction that you expected a rather brutal “bloodbath” type decline of gold (and the miners) into the ICL which you emphasized would also be the yearly cycle low, probably end of June/beg July. You also predicted that gold would bounce quite convincingly (which it clearly did today) and get everyone frothing thinking the rally that began in January is to immediately resume. We are clearly seeing this kind of reaction, exactly as you predicted, so I’m confused as to why you are now sounding “iffy” on your own call. Personally I do not think people ever got bearish enough on gold or the miners to signal a bottom and fuel a long rally from this point. Guess I just think you should stand by your call since you rather “pounded the table” on it in a number of videos and posts.

    1. tulip

      daummer- why should he stand pat on any of his calls when something changes a little on the horizon…?? Gary is just reporting what he ‘sees’…daily….weekly…
      Its reasonable to to change when one sees change…..it is foolish not to,,, cmon.
      This isn’t a weather satellite station…. and even they can change….

      1. daummer

        of course.. But what exactly happened that wasnt predicted? One big short covering-fueled up day after a pretty quiet, fearless, short lived consolidation? This suddenly changes the pounding the table about how when it’s time to buy the miners, noone will want to??.. Or that the charts always revert to the mean? These were things Gary said repeatedly as the miners were marching higher and as we had this pretty minor correction. It seems as if emotions are getting the better of quite a few people in my humble opinion.

        1. tulip

          if gold goes to 1300…. then completes the right shouldering… retest 1200
          will there be buyers……?I think Garys predicting a good upleg after the retest..
          if thats alright w u…

  5. Steffmeister

    US stockmarket’s breaking out to new highs, nope don’t think so. Me thinks we are heading south from here. A perfect place to short imo.

    As far as gold&silver goes, we entered the rebound zone of 15.70-16.20 for silver so maybe we are turning around with an intermediate high at mi/end August. However there is a possibility of a low later this month.

    1. Gary Post author

      What is the obsession with trying to short stocks that are protected by the Fed’s printing press?

      This has been a losing strategy for almost 7 years.

      1. Steffmeister

        Nope Gary I made $20.000 last summer in August shorting Spx. There are real analysts out there with excellent info about resistance trendlines. I’ve explained it here many times but it’s like explaining three dimensions to a person living in a two dimensional world.

        You called for new highs this year and a touch of the highs midsummer. The only head to spin this summer is yours Gary, when you look at a declining Spx chart 🙂

        1. Gary Post author

          You can’t be serious? The S&P is literally only 1 1/2 percent from all-time highs and you still see a bear market?

          Maybe you got lucky last summer and made some money shorting the market. But how much have you lost before that trying to pick a top in 2012, 2013, & 2014.

          I stand by my statement. For the vast majority of amatuer traders shorting is a waste of time and for those that will take an honest look at their trading history will find that over the long haul shorting has cost them more money thatn they’ve ever made.

          1. Steffmeister

            You can’t be serious, no breakout to new highs for more than a year and you still call it a bull market !?!?

            No I was not lucky the esoteric trendline was given to me 3months in advance and it was sitting at 2130 for Spx at that time. I think the trendline is still legit.

            No new highs Gary, do your homework please ! The yield curve is flattening, I guess the economy is in deep shit right now, the job participating rate confirmed that view.

  6. HHJ

    Me thinks a bloodbath in gold is still ahead. Miners even more so.

    A nice illustration of COT levels can be found at tradingster.com. Please see the commercial short position when gold was at 1300 in mid May. Then look at this Fridays numbers l (have to admit tradingster has done a good job of illustrating data). This Fridays increase in gold would have blown out the commercial short position again (this can be verified next friday).

    The question as far as COT is concerned is what will happen if this is a new upwards move for gold. Gold hitting 1300 and above will result in the largest commercial short position in 5 years and will pile up further into a true horror story. Not sustainable under any circumstances specially with an open interest of 650,000+ !

    Me thinks I stand no chance against commercial traders but I have seen enough fools who to this day think they can outdo this group of traders. Not the time to chase any weekend 30 dollar pop in gold.

    1. humbled

      can the COT commercials be forced to covertheir shorts, say should gold continue to power north, hence providing more fuel to any rally?

    2. Surf City

      HHJ, Looking at Commercial short positions now compared to the 5 year Bear positions is perhaps not as relevant as to their net positions during the Bull phase from 2009-2011 (especially 2010 if I recall correctly).

  7. HHJ

    Ofcourse shorts can be forced to cover however the probability is very low to none. I wont count on it to make money.

    What makes it less relevant? What is different this time? What has changed?

    What scares me is that gold fell from 1300 to 1200 on mere talk of a 0.25 percentage rate increase, what will happen if the fed actually does go ahead and raises the rates? Its food for thought and a strong evidence that gold in particular is driven very strongly by emotion and fear. The commercials take care of the rest.

    In the current situation open interest, commercial short position will keep me from calling this a new move higher. For me the COT needs to resolve (dec 2015 is a good example) before gold makes any worthwhile move higher.

  8. aceskings

    Hhj- imo your making 2 big mistakes. The first is using cot levels as any type of timing indicator and assuming what’s worked in a bear market will work in a bull one. You also have no clue what these people have in otc transactions.. The 2nd is assuming gold went down 100 points based on rates. I believe the fundamentals are totally useless and better to follow the charts.

  9. eddy1974

    It’s correct for you the end of this week is the last ICL of the SP Latin America Index or we need more volume in sell of LBJ?

  10. Don

    Not a word has been said about the beating the biotechs took on Friday. I closed my XBI position for an $80 loss. I am done trying to play something I don’t feel strongly about and I don’t see the biotechs going parabolic anytime soon.
    Gary, please don’t tell me once again that I need to get out of the short term trading mentality when you are doing exactly the same thing with the gold miners and the biotechs. Cutting losses has served me well when I am not comfortable with a position.

    1. Gary Post author

      LOL Just as I expected. Buy high, sell low. XBI hasn’t even dropped below the 10 day moving average. If you are going to buy with the 5 day RSI overbought you have to be prepared to hold through a pullback.

      Until you learn how to take and hold a longer term position you will never have any chance to make big money.

      We bought miners low and sold them high. No we didn’t get the exact top. I don’t know that I have ever gotten the exact top in a trade, but we did make a ton of money on our trade. we bought low again the other day, and I have a plan in place to tell us whether this is a fakeout before one more leg down or whether this is a slightly early ICL. If it is we won’t get left behind.

  11. Enkhee

    Hi Gary,

    Job numbers did not affect stocks and oil that much. Could this be a big trap engineered for gold?


    1. Gary Post author

      I covered what I think is going on with the metals extensively in the weekend report.

  12. daummer

    Wondering if Friday’s action in gold is just a big bull trap…? Think about it..The big boys are privy to inside info. How is it the jobs reports have all been pretty benign and then all of a sudden such an awful report? Personally, I believe the job market is pretty terrible and this report may be the first “honest” one we’ve seen in a long time, but if that is the case, one must ask “why”? Maybe so the Fed doesn’t have to raise rates in June like they threatened to do? That’s certainly a possibility.. Another possibility is a big bull trap for gold before a major downdraft to get more shares of miners and get the metal on fire sale before it really takes off again towards Gary’s $1400 price target by year end..?

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