Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Gold Ready to Begin Next Major Uptrend

Commodities / Gold & Silver Jun 06, 2008 - 12:30 AM GMT

By: Clive_Maund

Commodities Best Financial Markets Analysis ArticleGold is now in position to begin its next major uptrend, and in relation to where this uptrend is going to take it, it is considered to be at a very good price right now. According to the “Summer doldrums” crowd who are obsessed with seasonal factors, gold has to wait until August to go up, because everyone is preoccupied with Summer holidays, making the most of the good weather, pursuing pretty girls and looking after unruly kids released from the confines of school etc etc. Oh - is that so? - try telling that to Wall St traders who thought they were safe on the beaches of Long Island with their huge picnic hampers last August.


So let's get this straight - we no longer live in normal times and the markets are not going to wait on the convenience of people whose minds are not on their work. So if you are planning on strolling down to the station in August to find the train waiting for you, you may find that it left long ago without you.

On our 1-year gold chart we can see the fine uptrend that ran from last August, taking the price from approximately $660 to peak at about $1030 before it turned sharply lower and then proceeded to break down from the uptrend late in March. A classic bull market reaction followed that took the price back to strong support just above the 200-day moving average, after which it has stabilized, breaking out from the downtrend and in the process swinging the intermediate trend from down to neutral as a base area has formed above the 200-day m.a. The breakout from the downtrend was presaged by it taking the form of a bullish Falling Wedge. Even though the low at the end of April was considerably below the low at the end of March, the basing action can be considered to have started with the earlier late March low. Once the price broke out from the downtrend it quickly ran through the 50-day moving average, but as this indicator was still dropping back to close up its gap with the 200-day, it showed that the move was premature and this fact, combined with the overbought MACD histogram shown at the bottom of the chart, conspired to bring about the heavy reaction of the past week or two.

Emboldened by this drop, doom mongers have come out of the woodwork and have gotten hold of the ball again, telling anyone who will listen how gold is going to drop to $830 or even lower, when all that has happened over the past week or two is that gold has reacted back to test support at the top line of its earlier downtrend channel, and in the process allow the 50-day moving average to complete its return move back towards the 200-day, and the short-term overbought condition that followed the breakout to unwind.

The reality is that the present situation is very bullish indeed. The downtrend reaction has clearly ended as our chart shows - it has run its course and fulfilled its purpose of unwinding the excesses of the previous uptrend. Having broken out from the downtrend the price has since reacted back into a zone of strong support just above its still 200-day moving average. Now, with the 50-day moving average having reacted back most of the way to the 200-day, it won't take much of an advance to swing it back into an ascending trajectory, and this will result in a very favourable price and moving average alignment that typically occurs at the start of a major uptrend. Thus this latest reaction is viewed as providing an outstanding buying opportunity. Even if the Summer doldrums crowd end up being proved right, the worst we are likely to see is a trading range develop until the late Summer at and above the 200-day moving average. Sentiment in the Precious Metals sector is once again at abysmally low levels suggesting that we are likely to go up from here.

We will end by taking a quick look at the dollar. On our 1-year dollar index chart we can see that the dollar's uptrend over the past 10 to 11 weeks from its mid-March low appears to be nothing more than a weak countertrend rally within a larger downtrend, that has served to unwind the extremely oversold condition existing at that time. Now with the dollar running into the resistance level shown and approaching its steadily falling 200-day moving average, a resumption of the larger downtrend is to be expected, which will of course provide gold and silver with a following wind.

By Clive Maund
CliveMaund.com

© 2008 Clive Maund - The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maunds opinions are his own, and are not a recommendation or an offer to buy or sell securities. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.

Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.

Clive Maund Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules