Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Is Gold Getting Too Much Media Attention?

Commodities / Gold and Silver 2010 Sep 12, 2010 - 10:13 AM GMT

By: Clif_Droke

Commodities Best Financial Markets Analysis ArticleAfter a brief decline in July, gold once again finds itself in the investment spotlight as investors seeking safety from the turbulence of the bottoming 4-year cycle turn to gold. In its latest close, the gold price according to the 100 oz. COMEX index closed at $1,248.50 just below and within reach of its previous high of $1,260.


Crowd sentiment on gold and the gold stocks is obviously running high but I don’t get the sense it has reached the dangerously high proportions seen at major tops. The number of articles dedicated to the yellow metal in mainstream news publications has increased in recent weeks. At minimum this is a sign that investors should exercise caution on the near term trend, using the favorable publicity gold garners as a warning to tighten up stop losses on existing long positions.

Some analysts are going so far as to put a “sell” on the yellow metal due its recent surge in popularity. To get a contrarian sell signal we’d have to see outrageous levels of excitement over gold and gold stocks, coupled with a nearly linear or parabolic rise in price. We’d also expect to see something that has accompanied virtually every significant market top in recent years, which is when full color pictures of the lustrous metal are seen adorning the front pages of magazines and newspapers. The closest we’ve seen to this recently is the August 30 cover of Businessweek, which featured the face of billionaire financier Thomas Kaplan against a gold colored backdrop, headlined “The Gold Digger.” The article was in reference to Kaplan’s search for gold in Romania. This skirts the edge of the “gold cover” indicator but doesn’t quite qualify for it, IMO.



Another close call occurred in last weekend’s edition of the Wall Street Journal. On the front page of its finance section was the headline, “As Gold Climbs, So Do the Deals.” It was accompanied by a full color picture of the Eureka West vein outcrop at Andean Resources’ Cerro Negro gold exploration project. The article was itself a preliminary warning of a market top which is likely forming but I wouldn’t call it a deal breaker as far as sending a contrarian sell signal. The article described the trend of the larger gold producers currently on the move in search of attractive junior resource companies to acquire.

Already there have been a couple of high profile deals involving Goldcorp’s announcement that it would buy Andean Resources and Kinross Gold’s purchase of Red Back Mining. Such deals do tend to occur as a market top approaches but aren’t in themselves guarantors of an imminent reversal of trend. What you have to watch for to indicate the top is near is when the penny junior mining stocks start taking off in euphoric 2-3 day rally bursts, many of these rallies for no reason. This tells you that the speculative element has entered the market in full force and that a top beckons.

The single biggest factor behind gold’s latest rise isn’t speculative fervor or excessive greed – elements commonly seen at the conclusion of a major uptrend. Nor is the motive force a mere seasonal factor. Instead the driving force behind gold’s uptrend is the general concern – if not outright fear – over the economic outlook. As Matt Whittaker wrote in a recent Barron’s column, “Right now, people want gold because they’re uneasy. True, they aren’t as scared as they were in June about the European debt crisis, and they are less fearful of systemic collapse than during the financial crisis of 2008. Nowadays, it is a slow, simmering fear of prolonged anemic global economic growth.” Gold has been one of the best plays against the turbulence and uncertainty of 2010 and will likely continue to be as long as the employment rate and other key economic numbers remain weak.

Regardless of whether gold is near a top or not, one thing that must be said in its favor is that because of its long-term forward momentum, gold trading is ideally suited for trend line trading. If ever there was a better advertisement for the immediate-term trend line method of trading it would have to be found in the gold price of the last few months. The trend line breakout in early August allowed investors to ride the uptrend from $1,200 all the way up to $1,260 in the last month without any significant volatility along the way. Using trend line breaks for entry and exit signals has been the simplest and most effective way of participating in the interim trading range in gold that has been underway since May.



Silver Trading Techniques

With the precious metals long-term bull market well underway, many independent traders and investors are looking for ways to capitalize on short-term and interim moves in the metals. Realizing that the long-term “buy and hold” approach isn’t always the best, many are seeking a more disciplined, technical approach for realizing gains in the market for metals and the PM mining shares.

It’s for that reason that I wrote “Silver Trading Techniques” back in 2005. My goal in writing this book was to provide traders with some reliable trading indicators for anticipating and capturing meaningful moves in the price for silver and the silver mining shares. Included in this guide are rules for using the best moving averages when trading silver stocks, how to spot a turnaround in the silver stocks before it happens (best-kept secret!), how to tell when a silver stock has topped and which moving average crossovers work and which don't . Also explained are the best technical indicators for capturing profitable swings in silver and silver stocks and how to apply them.

You won't find these techniques in a copy of Edward's & Magee's book on technical analysis or anywhere else. These reliable "tricks of the trade" are available to you in Silver Trading Techniques. Click here to order:

http://www.clifdroke.com/books/silvertrading.mgi

All orders for the book will also receive a FREE copy of the recently published, “Gold Stock Trading Techniques,” which contains reliable strategies for short-term technical trading in the gold mining shares with an emphasis on safety and capital preservation.

By Clif Droke
www.clifdroke.com

Clif Droke is the editor of the daily Gold & Silver Stock Report. Published daily since 2002, the report provides forecasts and analysis of the leading gold, silver, uranium and energy stocks from a short-term technical standpoint. He is also the author of numerous books, including 'How to Read Chart Patterns for Greater Profits.' For more information visit www.clifdroke.com

Clif Droke 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