DiscoverGold
13 hours ago
Gold Tight Range Hints at Upcoming Volatility Surge
By: Bruce Powers | July 2, 2024
• Gold's recent sideways action and contracting volatility within a symmetrical triangle pattern suggest an impending breakout, either bullish or bearish.
Additional sideways price action dominated gold trading on Tuesday, as it has for the past several days. Gold has been trading within a relatively tight range with a low of 2,318 and a high of 2,340. Today, it is on track to complete an inside day as trading has occurred within the price range of Monday. Those three days are contained within a larger seven-day sideways price range with the same high price but a lower low of 2,294.
A tightening price range is representative of contracting volatility, which can also be seen with the two moving averages on the chart as they have converged recently. The purple 20-Day MA and the orange 50-Day MA have been tracking close to each other since the shorter 20-Day crossed below the 50-Day MA on June 17.
Tightening Range Designs Symmetrical Triangle
In addition, a symmetrical triangle pattern has been added to the chart (dark blue). It is also a good representation of contracting volatility. If gold stays within the boundaries of the triangle, consolidation will continue. But once a breakout either up or town triggers, volatility should expand. What follows a period of contracting volatility is typically a clear pickup in momentum.
Multiple Tests of Resistance
For each of the past few days, resistance was retested around the 50-Day line and price was rejected to the downside each time. In addition, a top rising trend channel line was also successfully tested as resistance as it has converged with the 50-Day line. Further, recent price action has also recognized resistance around the downtrend line. In summary, there are two trendlines and two moving averages that identify resistance near the highs of the past seven trading days.
Since gold is in a downtrend price structure, seeing resistance at lines that used to represent support is bearish and supportive of an eventual continuation lower for gold. However, a signal is needed as a bullish reversal remains a possibility as well. Sometimes, when a chart pattern seems clear, but momentum and volatility have contracted, a swing in the alternate direction occurs. Nevertheless, it is best to be prepared for either a continuation lower or a bullish reversal and higher prices.
Breakout – Up or Down?
A breakdown is indicated on a drop below the lower triangle line and then more clearly on a drop below the recent swing low at 2,294. There are then a couple interim price targets, but the primary downside target is 2,211 to 2,195. Meanwhile, bullish momentum should accelerate following a rise above 2,340 and more so on a move above last week’s high of 2,369.
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DiscoverGold
3 days ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | June 29, 2024
This market made a new high today after the past 2 trading days. The market opened higher and closed higher. The immediate trading pattern in this market has exceeded the previous session's high intraday reaching 23506. Therefore, this market has rallied over the past 15 trading sessions and there is a potential to move up for another 2 daysNevertheless, this market remains well above all seven of our intial support levels. Nonetheless, the market remains neutral on our system indicators.
This market has not closed above the previous cyclical high of 24067. Obviously, it is pushing against this resistance level.
Up to now, we still have only a 1 month reaction decline from the high established during May. We must exceed the 3 month mark in order to imply that a trend is developing.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Noticeably, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
The perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bullish currently with underlying support beginning at 23373 and overhead resistance forming above at 23497. The market is trading closer to the support level at this time. An opening below this level in the next session will imply a decline is unfolding.
On the weekly level, the last important low was established the week of June 3rd at 23042, which was down 2 weeks from the high made back during the week of May 20th. We have seen the market drop sharply for the past week penetrating the previous week's low and yet it recovered to close above the previous week's close of 23312. We are still trading neutral on the Weekly Momentum Indicators and this is a warning that initial support has been breached. This strongly implies we should pay close attention now to the Weekly Bearish Reversals. If we begin to elect Weekly Bearish Reversals, then we are dealing with a more sustainable near-term correction. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a weak posture.
Looking at this from a broader perspective, this last rally into the week of June 17th reaching 23826 failed to exceed the previous high of 24542 made back during the week of May 20th. That rally amounted to only four weeks. Right now, the market is neutral on our weekly Momentum Models warning we have overhead resistance forming and support in the general vacinity of 23042. Additional support is to be found at 23263. Looking at this from a wider perspective, this market has been trading up for the past 3 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Critical support still underlies this market at 19950 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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DiscoverGold
4 days ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | June 29, 2024
• Following futures positions of non-commercials are as of June 25, 2024.
Gold: Currently net long 246.2k, up 3.1k.
Once again, $2,300 drew bids, with Wednesday touching $2,305 intraday. By the end of the week, gold was up 0.4 percent for the week to $2,340/ounce.
Gold bugs have defended $2,300 for just over two months now. The metal came under pressure after recording a fresh high of $2,449 on April 12th. On May 20th, a new high of $2,454 was hit. Soon after, sellers appeared, but they have not been able to push the metal under $2,300.
From the bulls’ perspective, they have successfully held $2,300, but have been unable to use it as a launching pad for a new rally. The 50-day ($2,352) is beginning to roll over, with gold closing under the average in 14 out of the last 15 sessions.
Gold has come a long way since last October when it ticked $1,824 (was $1,996 this February) and cannot afford to lose $2,300.
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DiscoverGold
4 days ago
Gold Struggles Below Key Moving Averages
By: Bruce Powers | June 28, 2024
• Gold struggled against resistance at 2,340 and declined to 2,319, forming a bearish shooting star pattern for Friday..
Gold challenged resistance around the 50-Day MA earlier in Friday’s trading session but failed to retain the advance. Resistance was seen at 2.34 and was followed by a decline. As the end of the week approaches gold continues to trade near the lows of the day. At the time of this writing the low was 2,319. It is on track to close the day with a bearish shooting star candlestick pattern.
Resistance Seen Again at 20-Day MA
Heading into next week, unless gold can get back above this week’s high of 2,340, it is pointing to lower prices. The 20-Day MA crossed below the 50-Day MA three weeks ago signaling a weakening trend. Further, all this week the 50-Day MA acted as an area of resistance and today’s downside reaction further confirms that resistance. Both moving averages are angled down.
The May 3 swing high at 2,277 is a key price level as it forms the uptrend price structure of higher swing lows and higher swing highs. A decline below that level, followed by a daily close below it, will confirm a reversal of the bull trend.
Risk of Breakdown from Consolidation Top
The 61.8% Fibonacci retracement is at 2,262 and there may be some support seen around that price area. However, a drop below 2,277 triggers a breakdown of an approximate 8-Week consolidation top. That could lead to an acceleration in the price of gold to the downside towards the next lower target zone around the prior swing high of 2,212. Keep in mind that there is also an uptrend line around the support zone.
`Weekly Bullish Signal Above 2,340
Regardless of the bearish indication of today’s failed attempt to go higher, nothing is clear until there are further signals either confirming weakness or showing strength. A rally above today’s high of 2,340 would show strength and put gold back above the 50-Day MA, which is currently at 2,337. This week is set to close with a weekly high of 2,340 and a low of 2,294. So, a breakout above today’s high will also trigger a weekly bullish reversal. The two-week high is then at 2,369, representing the next potential weekly resistance zone.
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DiscoverGold
7 days ago
Gold Triggers Weekly Breakdown
By: Bruce Powers | June 26, 2024
• Gold's bearish flag and shooting star patterns suggest a likely drop below the recent swing low of 2,287, with key support levels at risk.
Gold triggered a bearish flag on the daily chart today and a shooting star on the weekly chart. The bear trend patterns point to a likely drop to below the recent swing low at 2,287. Previous support around the prior swing low from May 3 will likely follow and is at risk of being broken to the downside. At the time of this writing gold has reached a high of 2,324 today and a low of 2,294. But trading continues near the lows of the day and the daily low may be lower before today’s close.
Initial Downside Target at 2,262
Today’s decline also opens the possibility that gold reaches the downside target of 2,262. Falling to that price level will complete a 61.8% Fibonacci retracement of the uptrend begun from the February swing low. Interestingly, the 20-Week MA aligns with support of the 61.8% Fibonacci retracement level. However, a more significant target zone lies lower near the uptrend line.
That line is the bottom of a rising parallel trend channel. Gold is in the process of failing to hold strength near resistance at the top of the rising channel. Once resistance is seen at one side of the channel, a reversal back to the other side becomes possible. Therefore, if a drop below 2,277 occurs, a lower support zone starting around 2,211 and including the price area of the uptrend line is next on the agenda. The 78.6% Fibonacci retracement completes there.
Bearish Moving Average Crossover Provided a Clue
The recent bearish crossover of the 20-Day MA falling below the 50-Day further confirms weakness and the bear trend. Moreover, a weekly bearish reversal triggered today, and it is supportive of a deeper retracement to test lower support levels. Unless there is a relatively rapid recovery to the upside, gold is facing at least one to two weeks of down to sideways price action. Either way, a rally above the 50-Day line at 2,340 would be the first sign of strength. However, a rise above the recent interim swing high of 2,369 would be needed for a bullish reversal signal at this point.
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DiscoverGold
1 week ago
Gold Tests Trendline Support Amid Bearish Flag Pattern
By: Bruce Powers | June 25, 2024
• Gold tests trendline support at 2,315, forming a potential bear flag pattern, with critical levels indicating possible further declines if breached.
Gold further rolls out a potential bear flag pattern with another test of trendline support at the day’s low of 2,315. The bearish setup follows a sharp one-day decline on June 7 that reached a low of 2,287. That drop began a second wave down for the correction. A fifth wave down is possible if the low price on June 7 is broken to the downside. An initial breakdown signal will occur a little below today’s low, which is almost touching the line. However, there is also a weekly price level to watch.
Last Week’s Bearish Candle is a Risk
Last week ended with a bearish weekly candlestick pattern in gold. Therefore, a weekly bearish signal is triggered on a drop below last week’s low of 2,307. Since it would be a weekly signal, the possibility of a subsequent drop below 2,287 greatly increases if that happens. Nevertheless, the most recent swing low is at 2,277 from May 3. That swing low is part of the price structure for the rising trend. If it fails to hold as support on a deeper pullback, a drop below it triggers the breakdown from a topping formation.
First Lower Target is 2,252
The first target below the May 3 swing low starts around 2,252. That price would complete a falling ABCD pattern and is shown on the chart as the end of wave 5 of the decline. Regardless, there is a potentially more significant price zone a little lower starting from around 2,211. Notice that an internal uptrend line converges with the price zone as well. That line is parallel to the top internal trend channel line. It acted as resistance during each of the two failed attempts to break out and continue to rally into higher prices.
Bull Breakout on Break Above 2,369
Alternatively, an upside breakout is not indicated until there is a rise above last week’s high of 2,369. Until then, if gold does not break down, it may further chop around within the developing rising flag consolidation pattern. Once that happens the prior swing high around 2,388 is next on the agenda followed by an attempt to continue into new record highs for gold.
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DiscoverGold
1 week ago
Gold Continues to See Support
By: Christopher Lewis | June 24, 2024
• Gold market continues to see support, as we are trying to do everything we can to bounce from the crucial 50-Day EMA, and of course the $2300 level, an area that has been important more than once..
Gold Markets Technical Analysis
The gold market bounced slightly during the early hours on Monday as the 50-day EMA continues to be at least somewhat interesting and important. But underneath there, we also have the $2,300 level, which is a large round psychologically significant figure and the bottom of the overall consolidation area that we seem to have been in for the last several months, the $2,400 level above is a major resistance barrier.
And with that being the case, I think we’re just bouncing around in this general vicinity. The market that we have seen recently has shot straight up in the air and then over the last couple of months have gone back and forth, just trying to work off some of that excess froth. All things being equal, the gold market has plenty of reasons to continue going higher because central banks out there continue to buy it.
But beyond that, we also have to keep in mind that there are plenty of geopolitical concerns that could drive gold higher. Even if we broke down below the support level, which I would suggest is extending all the way down to the $2,280 level, then the market could very well go looking to the 200-day EMA underneath, which is sitting near the crucial and historically important $2,150 level, and in that environment, I’d be a buyer on that dip as well. At this point in time, it’s very difficult to get negative on gold for anything more than a few moments, as there is an entire litany of reasons to believe that gold should continue to rally over the longer term.
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DiscoverGold
1 week ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | June 22, 2024
NY Gold Futures closed today at 23312 and is trading up about 12% for the year from last year's settlement of 20718. Currently, this market has been rising for 7 months going into June suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Distinctly, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
From a perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bearish position at this time with the overhead resistance beginning at 23351 and support forming below at 23202. The market is trading closer to the resistance level at this time.
On the weekly level, the last important high was established the week of May 20th at 24542, which was up 14 weeks from the low made back during the week of February 12th. We have been generally trading up for the past 2 weeks from the low of the week of June 3rd, which has been a move of 3.402%. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a weak posture. Immediately, this decline from the last high established the week of May 20th has been important Before, this recent rally exceeded the previous high of 24488 made back during the week of April 8th. That high was likewise part of a bullish trend making higher highs over the week of January 29th. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action. Looking at this from a wider perspective, this market has been trading up for the past 7 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 18 months since the low established back in November 2022.
Critical support still underlies this market at 19950 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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2 weeks ago
Gold Stocks Reloading
By: Adam Hamilton | June 21, 2024
The gold miners’ stocks have been grinding lower for a month now, sapping traders’ enthusiasm. But this is par for the gold-summer-doldrums course, what typically happens in June. This sentiment-rebalancing drift is quite bullish for this high-potential sector, reloading it for another strong surge higher. With their probable mid-summer bottoming nearing, traders have a mid-upleg opportunity to add undervalued gold stocks.
Reloading always reminds me of target shooting, which was a fun part of my life growing up. Back then liberals hadn’t demonized guns yet, they were part of the cultural fabric. At my high school, its parking lot was full of kids’ pickups with loaded firearms hanging in their back windows! Most teenagers hunted with their fathers, and some participated in a local trap-shooting league along with my town’s police officers.
Back then ammunition was cheap, making target shooting affordable. You could buy 1000 rounds of 5.56 at many sporting-goods stores for under $100! That made for a fun afternoon of shooting with friends. My favorite targets were eggs. They are small and challenging to hit at range, explode nicely, and don’t need to be cleaned up as they’re biodegradable. Reloading magazines before shooting was the worst part.
That tedious chore took more time than shooting, eventually leaving sore fingers covered with lead dust. But that was necessary before loosing rounds downrange, so that anticipation overcame drudgery. Gold stocks remind me of that today, reloading before the fun rallying returns. They’ve been working off both serious overboughtness and greed since mid-May, paving the way for amplifying gold’s resuming upleg.
The leading GDX gold-stock ETF had a strong run into mid-May, powering 44.5% higher in just 2.7 months! That amplified gold’s driving surge in that same span by 2.3x, in the major gold stocks’ usual 2x-to-3x range. But gold stocks rallied so far so fast they grew really overbought. Just a month ago, GDX had stretched way up to 1.253x its trailing 200-day moving average. That proved a 12.6-month high in this metric.
Though extreme overboughtness for major gold stocks doesn’t begin until GDX stretches 35%+ above its 200dma, this sector was very overextended. Even more importantly, gold itself had blasted well up into its own extremely-overbought territory. The yellow metal needed to either sell off or drift sideways for some time to bleed away greedy sentiment. My essay last week analyzed gold’s high consolidation since.
That included charts of both gold and GDX divided by their 200dmas, revealing their overboughtness in mid-May and its subsequent mean reversions sharply lower. In major gold stocks’ case, during this past month GDX fell from 1.253x its 200dma to just 1.095x earlier this week! So the great majority of gold stocks’ serious overboughtness has been worked off, which also shifted herd sentiment from greedy to apathetic.
The problem with rallying too far too fast is it sucks in too many near-term buyers too soon. Traders really get excited when prices surge dramatically, so they rush to chase those gains. But that quickly exhausts their collective capital firepower for buying, prematurely burning it out. That leaves sellers in charge, and they easily force prices lower without offsetting buying. Slow and steady is far healthier for uplegs’ longevity.
That also reminds me of target shooting, where squeezing the trigger slowly is essential for accuracy. For long shots, you carefully control your breathing and pull so gradually the hammer dropping surprises you. Like fast gold-stock surges fast firing is fun, but quickly eats your magazines while mostly missing your targets. Then you have to reload again, giving hot barrels time to cool. That’s analogous to gold stocks’ June.
This chart is updated from my essay a couple weeks ago anticipating gold’s summer doldrums this year. It looks at the older HUI gold-stock index, which has been around far longer than GDX. But these are functionally interchangeable, including the same major gold stocks and moving in lockstep. The blue line is this summer’s gold-stock action indexed to May’s final close, while the red line is the gold-bull-year average.
Despite being much more overbought than usual heading into this market summer, the gold stocks have ground lower well within their seasonal drift. That has generally run between +/-10% from May’s final close, with June action usually being in the bottom half. At worst month-to-date so far, GDX was down 6.1% late last week. That may prove this summer’s gold-stock low, which occur two weeks into June on average.
But gold stocks are ultimately leveraged plays on the metal they mine, with their earnings and thus stock prices heavily dependent on gold’s fortunes. So how GDX fares in the next couple weeks will reflect what gold does. While gold’s own average summer-doldrums seasonal low is also in mid-June, that was only pulled forward in recent years. Historically gold tended to bottom in the last week of June into early July.
There are some good arguments for gold drifting lower before resuming its upleg, which I explained in my essay last week. Gold remains overbought, merely retreating to 1.096x its 200dma in early June. That is about 2/3rds up into its overboughtness range, compared to GDX only being around 1/4th up into its own. In addition, the latest-reported speculators’ gold-futures short positions are at a deep 4.1-year secular low!
That means these super-leveraged traders who often bully around gold prices now have massive capital firepower available for short selling on the right catalyst. That ramps near-term downside risks for gold, and thus their miners’ stocks. Picking bottomings is always a probabilities game, traders never know for sure when they are in. So spacing out adding new positions to attempt to straddle bottomings is prudent...
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2 weeks ago
Gold Bearish Sentiment Grows Amid Failed Breakout
By: Bruce Powers | June 21, 2024
• Gold’s failed breakout above the 50-Day MA puts it at risk of further declines, testing key support levels at 2,307.
Gold is at risk of failing yesterday’s bullish breakout above the 50-Day MA and downtrend line. Friday’s price action is set to end with an outside day. And, at the time of this writing gold continues to trade bearish, below yesterday’s low of 2,328, and below three trendlines plus the 50-Day MA. Each has now failed to hold as support during today’s pullback. This is not bullish behavior and puts recent lows at risk of being tested as support again, if not broken.
Bearish Weekly and Daily Signal Below 2,307
This week’ slow of 2,307 can be seen as a price level with some significance. Being a weekly low, a drop below it will signal a bearish continuation in the weekly time frame. Larger time frame patterns tend to influence lower time frame patterns. That is the fractal nature of the financial markets. Therefore, the higher time frame can take priority relative to a trader’s time horizon.
Daily Bear Flag
A drop below 2,307 on the weekly chart can be seen on the daily chart as a decline below the short rising trendline across support of recent daily lows. On the daily time frame the price action of the past two weeks has taken the form of a small bear flag. So, a drop below last week’s low would provide a bearish signal for both time frames, the daily and the weekly. It should also be noted that this week is on track to end with a bearish shooting star candlestick pattern. Although it is not occurring at the top of a trend it still provides a sign of short-term bearish sentiment.
Rally Above 2,370 Needed for the Bulls
There is not much set up yet on the chart for bullish indications other than a breakout above today’s high of 2,370. Since the first breakout attempt is already showing weakness, a continuation of the consolidation phase may continue before much follow through occurs, either up or down. Nonetheless, if natural gas breaks out above this week’s high of 2,369 next week, it could continue to see an acceleration in price towards the most recent record high of 2,450.
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2 weeks ago
Gold Bullish Breakout Signals Potential Upside Rally
By: Bruce Powers | June 20, 2024
• Gold breaks out above 50-Day MA and downtrend line, signaling potential for further gains and bullish continuation.
Gold broke out to the upside on Thursday, reclaiming the 50-Day MA above 2,343 and triggering a breakout of the downtrend line. A subsequent daily close above each will confirm strength of the breakout. Also, watch where the day ends within the day’s range of 2,328 and 2,365. Moreover, today’s close will likely exceed the top trend channel line, which has marked an area of support or resistance since a bullish breakout above the line first triggered in early-April. Further, a bullish weekly reversal was triggered above last week’s high of 2,342.
Long-Term Bullish
The larger developing pattern in gold is the bullish breakout of a rising trend channel following a multi-year base breakout in early-March. The longer the base the greater the potential bullish move that follows. Gold gave a preview during the rally starting from the February 15 swing low that accelerated following the February 29 breakout of a symmetrical triangle trend continuation pattern. The advance from the swing low to the 2,450-record high from a month ago was 465.80 points or 23.5%. For reference, the four previous upswings were 17.9% and 28.8%, respectively.
Second Breakout May Hold
A second channel breakout attempt triggered today. Sometimes, a second breakout entry can prove to be more promising. Moreover, if the 2,287-swing low continues to hold as support then gold will have completed a relatively shallow retracement. Notice that the lows of recent price action remained near the top channel line, also a sign of strength. But it needed today’s rally first to determine whether a low has been reached. The area around the line retained support.
Retracement Should Be Complete
If today’s advance is followed by further strengthening, the retracement is likely complete. A rise above the most recent swing high of 2,388 will further confirm strength and a bullish reversal following the correction. It is the next more significant price level that needs to be exceeded. There are several initial targets heading into new record highs. For now, the 127.2% Fibonacci extension of the recent retracement will be the most likely near-term initial upside target.
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2 weeks ago
Gold Volatility Looms as Pennant Pattern Develops
By: Bruce Powers | June 19, 2024
• With gold trading in a narrow range, a breakout above 2,335 or below 2,296 could signal the next significant move.
Gold traded in a narrow range on Wednesday with a high of 2,335 and a low of 2,324. The high took the price of gold above the top boundary line of a potential bearish pennant pattern (small symmetrical triangle) briefly before a pullback into the consolidation range. Although the 20-Day was also exceeded briefly, resistance was seen at a top rising trend channel line. The top of the pattern at 2,342 is marked by resistance of the 50-Day MA (2,344) and the downtrend line.
Bullish Above 2,335
A decisive breakout above 2,335 will provide the next sign of strength that may give gold a chance to keep rising. Last week’s high of 2,388 is also critical as a move above it would trigger a weekly breakout and a rise above the most recent interim daily swing high. Gold began an attempt to breakout from the rising parallel trend channel in early April, which eventually failed with the decline below the line on June 7. It has since traded below the line, putting it at risk of a deeper retracement than what has been seen currently. A second upside breakout of the channel has a chance to keep going if momentum can be maintained once triggered.
Bearish Below 2,296
The bearish pennant will trigger with a drop below its lower boundary line, but the recent minor low of 2,296 can be used as a clearer signal. Also, a drop below the three-week low of 2,287 will confirm the breakdown.
Possible Double Inside Week
Unless gold can rally above last week’s high of 2,342 before the end of this week, it is on track to complete the week as an inside week. As it stands now gold has an inside week setting up this week and an inside week last week. It shows price contraction, which is typically followed by a spike in volatility. Which direction it heads in will be signaled by a breakout of the pennant pattern. The pennant would indicate that a breakdown is more likely, however, that would change if support continued to hold and is followed by a bullish breakout instead.
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2 weeks ago
Gold Bear Pennant Signals Possible Decline
By: Bruce Powers | June 18, 2024
• A potential bear pennant pattern in gold's price suggests a bearish continuation, with key resistance at the 50-Day MA.
Volatility in the price of gold has been contracting as it has formed a potential bear pennant consolidation pattern. It follows a sharp one-day drop from the 2,388-swing high (C), which generated the pole to go along with the pennant. This pattern is considered bearish as it has formed within a larger decline (retracement). Nonetheless, if a bullish breakout occurs the pattern may morph into a larger or different pattern.
Resistance at 2,342
The recent minor swing high of 2,342 defines the top resistance level for the current seven-day consolidation pattern. Therefore, a breakout above the level would provide more confidence than a move above a boundary line. Further, the 50-Day MA (orange) is currently acting as resistance at 2,344. It should be considered along with the 2,342 high as a breakout above both price levels is needed for a bullish signal. Given where the price of gold is sitting relative to the apex of the symmetrical pennant triangle, a move out of the pattern is likely within the next several days.
Bearish Trend Pattern
Certainly, the trend pattern in gold for the short-term looks bearish. A bearish trend continuation pattern (pennant) has formed just below resistance of the 50-Day MA. The 50-Day line had been indicating support previously. Other signs of weakness include the 20-Day MA (purple) crossing below the 50-Day a couple days ago. Also, a top rising trend channel line had previously been acting as support but is now being tested as resistance. Once support breaks after holding for a while it will likely be tested as resistance to some degree. After that dynamic is complete a bear market is ready to proceed.
Reality Needs a Signal
Nevertheless, anything can happen regardless of the pattern. A pattern breakout needs a signal to confirm the pattern. On the downside, a drop below last Thursday’s low of 2,296 will trigger a breakdown from the bear pennant. The next lower target at 2,252 completes a declining ABCD pattern. While further down is a price zone starting from around 2,211. If gold gets that low also keep an eye on its relationship to the uptrend line.
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2 weeks ago
Rich countries plan to buy more gold despite record price
By: Financial Times | June 18, 2024
• Advanced economies’ central banks expect the metal’s share of global reserves to rise at the expense of the dollar
Advanced economies’ central banks expect gold’s share of global reserves to rise at the expense of the US dollar, as these institutions look to follow the lead of emerging markets in buying bullion.
Almost 60 per cent of rich countries’ central banks believe that gold’s share of global reserves will rise in the next five years, up from 38 per cent of respondents last year, according to an annual survey conducted by the World Gold Council, an industry promotion group.
About 13 per cent of advanced economies plan to increase their gold holdings in the next year, up from around 8 per cent last year and the highest level since the survey began. That follows the lead of emerging market central banks, which have been the main purchasers of gold since the 2008 global financial crisis.
Meanwhile, a rising proportion of advanced economies — 56 per cent, up from 46 per cent last year — also think the dollar’s share of global reserves will fall over the next five years. Among emerging market central banks, 64 per cent share this view.
The demand for gold, which comes despite a sharp rise in the price of the yellow metal this year, highlights how allocations to the dollar have been declining as central banks have sought to diversify their holdings through alternative currencies and assets, especially after the US weaponised its currency in sanctions against Russia.
“This year we’ve seen much stronger convergence. More advanced countries are saying that gold is going to occupy more of global reserves and the dollar will be less,” said Shaokai Fan, global head of central banks at the WGC.
“It wasn’t the emerging market countries evaluating these factors less but advanced markets catching up to how emerging markets feel about gold,” he added.
The survey — one of the few insights into the thinking of publicity-shy reserve managers — found that a record share of central banks since the survey began five years ago intend to increase their gold reserves over the next 12 months, at 29 per cent of respondents. Of the emerging market respondents, nearly 40 per cent plan to raise their holding.
The main reasons cited by central banks for holding gold are its long-term value, performance during a crisis and its role as an effective diversifier.
Central banks added more than 1,000 tonnes of gold to their reserves in both 2022 and 2023, according to the WGC. US sanctions on Russia’s dollar-denominated assets prompted a rush among non-western official financial institutions for bullion — the value of which does not rely on any government or bank, unlike fiat currencies.
The consecutive years of record buying, the pace of which has continued into this year, has been a driving factor behind gold’s rally to nearly $2,450 per troy ounce last month. It is up 42 per cent since the Israel-Hamas conflict began in October.
The dollar’s share of global foreign exchange reserves — excluding gold — has plummeted from more than 70 per cent in 2000 to about 55 per cent last year, stripping out the effect of US dollar appreciation, according to research from the IMF this month. Including gold, the dollar’s share has dropped below half, the WGC says.
Although the Chinese renminbi has made some gains as a reserve currency, the uncertainty hanging over the country’s economy has meant that the percentage of central banks expecting it to increase its share of global reserves fell from 79 per cent last year to 59 per cent this year.
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2 weeks ago
Gold Continues to Bounce Around in a Range
By: Christopher Lewis | June 17, 2024
• The gold market pulled back a bit in the early hours of Monday, but at this point we still have a lot of support just below, offering a potential buying opportunity. The gold market has plenty of support levels worth watching.
Gold Markets Technical Analysis
The gold market pulled back just a bit during the early hours on Monday, but we are still in an area that’s been very noisy and important. So, I do think it is probably only a matter of time before the buyers come back into the market. It’s probably worth noting that the 50 day EMA continues to slice through the consolidation area.
And therefore, I think there is a certain amount of technical analysis that comes into this picture to offer a little bit of technical support and perhaps algorithmic support, depending on who’s out there putting money into the market. Underneath there, we have the $2,300 level, which of course has been supported for quite some time, which extends down to the $2,280 level. A break above the highs of the day opens up the possibility of a move to the $2,370 level, possibly a move to the $2,400 level after that.
Keep in mind, gold has plenty of reasons to go higher, although pulling back is possible at this point, but given enough time, I think we do see the market try to get to that $2,400 level for no other reason than perhaps geopolitics. If we do break down below $2,280, then there are plenty of areas of support underneath, especially near the $2,200 level, maybe even the $2,150 level where the 200-day EMA sits. Regardless, this is a market though, that I don’t have any interest in shorting, and I do think it’s more likely than not we see a bit of a bounce from this region.
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2 weeks ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | June 15, 2024
NY Gold Futures closed today at 23491 and is trading up about 13% for the year from last year's settlement of 20718. Immediately, this market has been rising for 7 months going into June suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Clearly, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Focusing on our perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bullish currently with underlying support beginning at 23373 and overhead resistance forming above at 23542. The market is trading closer to the resistance level at this time.
On the weekly level, the last important high was established the week of May 20th at 24542, which was up 14 weeks from the low made back during the week of February 12th. We have been generally trading up for the past week from the low of the week of June 3rd, which has been a move of 2.369%. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a weak posture. Immediately, this decline from the last high established the week of May 20th has been important Before, this recent rally exceeded the previous high of 24488 made back during the week of April 8th. That high was likewise part of a bullish trend making higher highs over the week of January 29th. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is neutral on our weekly Momentum Models warning we have overhead resistance forming and support in the general vacinity of 23263. Additional support is to be found at 23006. Looking at this from a wider perspective, this market has been trading up for the past 6 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 18 months since the low established back in November 2022.
Critical support still underlies this market at 19950 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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3 weeks ago
Gold Consolidating High
By: Adam Hamilton | June 14, 2024
Gold has generally drifted sideways for a couple months now, consolidating high. That lack of progress has significantly eroded sentiment, bleeding off greed and stoking bearishness. But this healthy process is exactly what gold needed to rebalance sentiment. After soaring to extremely-overbought levels in April, greed grew excessive. The high consolidation since is bleeding that off, readying gold for another surge higher.
From mid-February to mid-April, gold blasted a powerful 20.0% higher in a remarkable breakout surge. Fully 19 new nominal record closes were achieved in that short span, which really excited traders! The lion’s share of that upside wasn’t fueled by gold’s usual primary drivers, speculators buying gold futures and American stock investors buying gold-ETF shares. Chinese investors and central banks took the helm.
But since hitting mid-April’s dazzling $2,388 record, gold has mostly ground sideways. Initially a pullback emerged into late April, dragging gold a mild 4.0% lower. Then the yellow metal reversed higher in a nice surge into mid-May, propelling it up 5.8% to $2,424. But that renewed momentum quickly stalled out, and gold fell another 5.7% to $2,286 into early June. Overall since mid-April, gold has drifted 2.7% lower as of midweek.
This recent drift has formed a trading range mostly running from $2,300 to $2,400. Grinding sideways is the technical definition of a consolidation, and this is definitely a high one. While these gold levels have started to feel normal over the last few months, $2,100+ gold was never even witnessed before early March! Holding up here is really impressive technically, especially after surging to extremely-overbought levels.
Short-term price action drives sentiment, popular greed and fear. That in turn regulates how fast traders buy and sell. Even as a herd, the capital firepower they control is finite. So if prices surge too far too fast generating too much greed, traders chasing that strong momentum can soon exhaust their buying. That prematurely burns out uplegs, ceding control to sellers. Staying healthy requires periodic sentiment rebalancings.
There are two ways to vent excessive greed fueled by big-and-fast rallies, selloffs and consolidations. The former are quicker in crushing greed and stoking fear, proportional to how fast and far prices fall. For selloffs 10% is the dividing line between pullbacks and corrections. Gold’s pair of modest pullbacks since soaring into mid-April have definitely helped, with herd sentiment considerably more bearish as they bottomed.
Consolidations also bleed off greed, working slower and taking longer. Those sideways drifts generally don’t generate much fear, which directly kills greed. Instead lackluster price action gradually saps traders’ enthusiasm. That has certainly been the case for gold since mid-April, with bullish excitement increasingly giving way to apathy. Yet despite this high consolidation, gold remains up a strong 12.6% year-to-date.
While popular greed and fear are ethereal and can’t be measured, they can be inferred through price action. Greed flares proportionally with overboughtness, which reveals how fast and far prices have run. My favorite measure of this simply divides prices by their trailing 200-day moving averages. When these multiples are charted over time, horizontal trading ranges form. Decades ago I built a trading system around this.
Called Relativity, it looks at prices relative to their 200dmas. I define relative trading ranges based on the latest five calendar years of data. In gold’s case, that now runs between 0.90x to 1.15x its 200dma. This rGold range’s lower support is extremely oversold, while its upper resistance is extremely overbought. Gold blasted higher so fast and far into mid-April that it soared well into this risky greed-drenched territory.
Price action is always best considered in context, and gold’s blistering 20.0% surge in just 2.0 months is massive on this secular chart. That stretched gold way up to 1.188x its 200dma, the most overbought it had been in fully 3.7 years! In this chart the actual gold price in blue is superimposed over rGold in red. That effectively flattens gold’s 200dma to 1.00x, revealing how far gold deviates in constant-percentage terms.
It is exceedingly rare for gold to skyrocket 18%+ above its baseline 200dma. That last happened briefly in late July and early August 2020, as a monster 40.0% gold upleg peaked! Surrounding that gold spent 14 trading days over 1.18x, drenched in enormous greed and euphoria. But that had to be rebalanced away, and soon was with a large 9.8% pullback which subsequently grew into a major 18.5% correction.
Extreme overboughtness is a bearish omen for gold, as I warned in a mid-April-2024 essay days before gold crested. Then I wrote “fast plunges are the normal way extreme overboughtness and greed are rebalanced. But sometimes surging prices simply consolidate high... Sideways drifts after parabolic ascents also bleed off excessive greed, but with a much-slower pace. They might take a few months to mature”.
And here we are a couple months later where gold indeed ground sideways to lower on balance. This high consolidation since mid-April has really worked off those extremely-overbought conditions. Again rGold had soared way up to 1.188x then, and has since retreated as low as 1.096x last Friday on another huge monthly-US-jobs upside surprise. Gold is far-less overbought now, out of the sharp-selloff danger zone!
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3 weeks ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | June 15, 2024
• Following futures positions of non-commercials are as of June 11, 2024.
Gold: Currently net long 233.9k, down 3.4k.
Last Friday, after hugging the average for 10 consecutive sessions, gold sliced through the 50-day. This week, it remained under the average in all five sessions, with attempts to reclaim in on Wednesday unsuccessful. That said, the metal ($2,349/ounce) is not that far away from the average at $2,358, and there is room to rally on the daily. For this, defense of $2,300 is a must for gold bugs. Else, the weekly can take over.
Gold has come a long way since last October when it ticked $1,824 (was $1,996 this February). It came under pressure after it set a new high of $2,454 on May 20th.
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3 weeks ago
Gold Faces Key Resistance at 50-Day MA
By: Bruce Powers | June 14, 2024
• Gold consolidates at 2,345, facing resistance and potential bearish indicators, with key support levels crucial for maintaining the current uptrend price structure.
Gold further consolidated on Friday, testing resistance around the 50-Day MA, which is currently at 2,345. The 20-Day MA converged with the 50-Day line today and marks the same price area. A bearish sign will be indicated if the 20-Day line crosses below the 50-Day. Gold is sandwiched between the moving averages at the top and last week’s low of 2,287 at the bottom of a five-day price range.
Resistance Zone from 2,345 to 2,350
Another price area to keep an eye on for resistance is a little above the 50-Day MA at 2,350. That price completes an initial target for a small rising ABCD pattern. And it is contained within last Friday’s wide price range, which by itself influences choppy price action. Last Friday’s high of 2,388 began with a bullish breakout but ended with a failed breakout and a bearish close. Therefore, given the current price patterns in gold, it looks like a decisive rally above 2,388 would be needed to sustain a bull reversal into new record highs. Otherwise, support remains at risk of being broken to the downside.
Weakness Likely Below 2,301
Weakness would next be indicated on a drop below today’s low of 2,301 and further confirmed on a decline below last week’s low of 2,287. Regardless, the recent swing low of 2,277 cannot be ignored. It defines the price structure of the uptrend and is a key price level to watch for support. If it is approached a third time it seems likely to give way to lower prices. Certainly, characteristics of the trend can change, but a drop below it would be considered bearish and provide a clearer sign that sellers were in charge.
Lower Pivots Start With 2,252
Downside pivots are at 2,252, 2,211, and 2,195. The lower price level takes on greater importance given its nearby neighbor, the uptrend line. Also, the trendline takes on greater significance since it would follow a successful test of resistance around the top line of a parallel trend channel most recently. Once price reverses from resistance in a chart pattern it tends to at least attempt if not reach the other side of the pattern. For gold that dynamic would be complete if it reaches the price area of the uptrend line.
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3 weeks ago
Gold Markets Continues to Look Strong
By: Christopher Lewis | June 14, 2024
• The gold market has rallied a bit this past week, from a crucial support level near the $2300 level. This is an area that traders have been watching time and time again. This is a market that has plenty of reasons to go higher over the longer term.
Gold Markets Weekly Technical Analysis
Gold has rallied during the week as we continue to see the $2,300 level offer support. This is not a huge surprise considering all of the geopolitical issues that are going on right now. And of course, the fact that the $2,300 level has been so important multiple times in the past. With this, I think you’ve got a situation where the market participants are going to continue to go back and forth, looking for some type of reason to break out, and I do think eventually they will find them now. Keep in mind that the market had recently shot straight up in the air, so I suspect most of what we are seeing here has more to do with the idea of simply working off some of the excess froth.
The $2,400 level above should continue to be a bit of a target, and if we can close above there, I suspect that the next time we do, we will continue to go much higher. I do like the idea of owning gold. I think geopolitics alone makes it interesting, but keep in mind that central banks around the world are collecting gold as well, so you have a built-in buyer.
Beyond that, you have profligate borrowing by, well, the United States at a trillion dollars every 90 days. So that of course puts upward pressure on gold. And at this point in time, just simple momentum is in your favor from the longer term standpoint.
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3 weeks ago
Gold Shows a Type 2 Rainbow Convergence
By: Tom McClellan | June 13, 2024
On June 12, 2024, the day of the FOMC meeting announcement, gold prices were making a rebound up move after pausing unchanged for 2 days in a row. Making that up move, and then moving downward on June 13, constitutes a big "tell" about what lies ahead.
This week's chart is one I show frequently in my Daily Edition. It features 4 moving average type lines, which are explained here: https://www.mcoscillator.com/learning_center/kb/market_data/calculating_indicators_in_daily_edition_table/. Only the middle two lines (red and green) are true exponential moving averages (EMAs). The others are related indicators, which behave somewhat like moving averages, but which have interesting additional properties which make them interesting to include in the chart.
When those 2 EMAs, the 10% Trend and 5% Trend cross, we actually see all four moving averages come to what we call a "rainbow convergence". These events are important, and the way in which they are important varies depending on how prices are behaving at the moment of the convergence.
In a Type 1 rainbow convergence, prices make an accelerated short term move which pulls the four lines together all at once. Here is an example from a few months ago:
You can see in that chart that gold prices reached a short term top right as the four lines came together, and this is a great example of what usually happens. In a Type 1 convergence, prices typically pause starting at the moment of the convergence. That pause can be just a rest break or the start of a reversal. Which of those it is depends on how prices do when they make a test of the blue Price Oscillator Unchanged line. In this particular case, that line failed as a support agent, and gold futures prices pulled back further.
In a Type 2 convergence like what we appear to have in the top chart, prices make a retracement back toward the price-time point of the impending convergence. The message of a Type 2 convergence is that the price trend direction which preceded the retracement should reassert itself. So for this week's chart featuring gold prices, that would mean prices start downward again after the brief retracement move back up toward the impending convergence. And that seems to be what we are getting.
The determination of a Type 2 convergence only has a limited duration utility. It will not tell us how far the resumed trend will travel, just that there should be one. And a chartist must be careful when making such determinations, because a retracement back toward an impending rainbow convergence does not necessarily have to stop retracing. It could keep on going. So one should not be too eager about making such determinations too early.
One other caveat to remember is that these are specifically chosen examples for the purpose of illustrating a phenomenon. There are exceptions one can find, where prices did not behave exactly as this description dictated. No charting interpretation works perfectly all the time.
For both of these charts, the two main EMAs that drive this phenomenon are the 10% Trend and 5% Trend of closing prices. Some analysts would call these a 19-day and 39-day EMA, but we prefer the originalist terminology coined by the late P.N. Haurlan, who first introduced the use of EMAs for tracking stock prices back in the 1960s. The numbers 10% and 5% refer to the smoothing constants, which determine how fast the EMAs move toward where prices are going. The larger the smoothing constant, the faster the response. See this page for more on EMA calculations.
The same principle about crossovers and price response can work with other moving averages. I wrote here about how it works with a 50-day simple moving average (SMA) crossing a 200-day SMA. This puts a whole different spin on interpretation of a "golden cross" or a "death cross". The implication really depends on how prices are behaving at the moment of the crossing.
Tom McClellan
Editor, The McClellan Market Report
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3 weeks ago
Gold Faces Bearish Retracement, Key Support Levels in Focus
By: Bruce Powers | June 13, 2024
• Bearish signs increase for gold as it falls below key near-term levels, with support zones from 2,287 to 2,277 and potential targets around 2,252.
Gold triggered a bearish drop below yesterday’s 2,311 low today, thereby triggering an initial signal for a small bearish flag from the past few days. Resistance for the day was seen at 2,327, which was below yesterday’s high of 2,342. Sellers have been dominating price action since.
At the time of this writing gold looks like it will likely end Thursday’s trading session with a full red candle closing near the lows of the day. That will setup up gold for a continuation lower. However, confirmation of weakening will be needed as recent support may continue to stop the descent.
Bearish Continuation Below 2,287
There is a price support zone for gold from around last week’s low of 2,287 to the prior swing low at 2,277 from early May. Given recent bearish price behavior, including a drop below the 50-Day MA, the bearish rejection at resistance around the 50-Day line yesterday, and a bearish trend continuation signal given when gold fell below 2,315 (B), the risk of a deeper retracement is growing.
The bottom of the current support zone is at 2,277. Therefore, a decisive drop below that price level is needed for a clear bearish continuation signal. A decline below 2,287 will show weakening but not necessarily a breakdown that is sustainable as support may still be seen around the May swing low.
Lower Target Zone Approaches Trendline Support
The next lower target area is around 2,252. That is where a falling ABCD pattern completes. Both the AB leg of the decline and the CD leg will match the price change at that target. It will reflect price symmetry between the two swings. Once there is symmetry, the possibility of an important pivot is identified. Nevertheless, a decline below 2,252 will likely lead to a test of support at lower levels. Lower down is a price zone from roughly 2,211 to 2,195.
That area was previously the top of the trend and initiated a decisive breakout that propelled gold higher. Prior resistance areas tend to be subsequent support on a pullback, and that is what may occur with gold. If this lower price zone is approached the lower uptrend is another indicator to watch as it defines a lower parameter for a rising parallel trend channel.
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3 weeks ago
Gold Faces Critical Support Zone Amid Ongoing Selling Pressure
By: Bruce Powers | June 11, 2024
• Gold's support at 2,287 may hold, but resistance at 2,344 and a significant support zone around 2,195-2,215 suggest continued downtrend risk.
Gold has been holding a support zone for the past couple days that was hit on Friday with a low of 2,287. That price area is marked by both the 50% retracement and support of a top trend channel line. Although a higher bounce to test resistance around the 50-Day MA at 2,344 may occur, gold broke through that key moving average line and kept falling last week. This indicates selling pressure that may not yet have been fully relieved. Nonetheless, last week’s low could still turn into a bottom, unless gold drops below 2,287.
Rallies Head into Resistance
A rally into resistance will occur within a developing downtrend. Therefore, there continues to be a good chance that lower price targets are eventually tested during this correction. The initial lower target is the completion of a falling ABCD at 2,252. If last week’s low of 2,287 is broken to the downside, this next target comes on deck. But there is a more significant price target zone underneath there. It has greater significance because there are multiple indicators pointing to the same price area. That price zone is around the previous breakout area of 2,195. It is included with a price zone that begins around 2,215.
Weekly Bearish Pattern
An uptrend line provides the maximum likely retracement as it resides at the lower end of a rising parallel trend channel. Gold was rejected around resistance at the top of the channel with last Friday’s high of 2,388 (C). Also, the weekly chart ended last week with a bearish shooting star candlestick pattern. It had a top tail and closed near the lows of the week. A drop through last week’s low will trigger that bearish candle. Until then, it remains a possibility.
Bullish Reversal Not Seen Until 2,388 is Exceeded
Given the current price structure near the top of the trend, gold would not be clearly showing strength that may be sustainable until there is a decisive advance above last Friday’s 2,388 high. Until then, the developing downtrend rules. Another possibility is that last week’s low continues to hold and that gold eventually strengthens to provide a new bullish signal. Or it falls lower but quickly recovers to close above last week’s low.
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3 weeks ago
Gold Cycles Were Correct! Key Update
By: Jim Curry | June 9, 2024
From comments made in my articles in past months, Gold had formed a key bottom back in mid-February - and with that was projected higher into mid-April of this year, or later. From there, a correction was favored to play out into the late-May to early-June window, where the next bottom of significance is now due to form.
Gold's Dominant 72-Day Cycle
The 72-day cycle is currently the most dominant cycle in the Gold market. This wave saw a mid-February bottom giving way to a sharp rally - one that was not projected to peak prior to April 9th of this year.
Shown again is that 72-day cycle component:
Following a peak on April 12th, the downward phase of this 72-day cycle began to assert itself, with the metal dropping some 6.6% into early-May. From there, however, a push back to a minor new high was seen into May 27th - though that rally was not able to take out the April peak on a closing basis.
With the above said and noted, our overall assessment remained intact, which called for a 72-day bottom made into the late-May to early-June window, though this window could extend slightly, from the original (time) projections.
Price Considerations
From my 5/26/24 article: "with price, we normally expect to see a drop back to the lower 72-day cycle band as this wave bottoms out - something that has been seen prior to 85-90% of the lows for this particular wave. In terms of time, this 72-day cycle is still projecting a bottom in the coming weeks, and with that - until proven otherwise - we would like to see additional weakness playing out, then to be on the lookout for technical signs of a bottom forming."
In terms of price, the ideal path favored a correction back to the 72-day moving average or lower, seen 90% of the time before our 72-day cycle normally bottoms.
With the above, Friday's action has now dropped Gold back to its 72-day moving average. Having said that, Friday's sharp decline seems to favor additional weakness into the new week, with the next logical magnet being the lower 72-day cycle band - something which also tends to be hit prior to 72-day lows.
Going further with the above, we are close to triggering a new upside 'reversal point' for this 72-day wave. This reversal point figure will be an exact price number for Gold, which - when taken out to the upside - will confirm the next upward phase of this 72-day cycle to be back in force, with precise details in our thrice-weekly Gold Wave Trader report.
The above is key, as the average rallies with this 72-day wave - when forming the pattern of a 'higher-low' - have been in the range of 10-14% or more. This gives us some idea of the potential upside, once this cycle does bottom.
The Mid-Term Picture
For the mid-term view, the larger upward phase seen since October, 2023 has come from our 310-day cycle - as well as the even-larger four-year wave - with the smaller 310-day component shown again on the chart below:
As originally mentioned back in the Autumn of last year, the last mid-term low was expected to come from this 310-day wave. The upward phase of this cycle was confirmed to be back in force back in late-October of 2023, thus confirming a 20-25% rally to be in force - projected to last into the Spring/Summer of this year.
With the above said and noted, a low that forms with our 72-day wave - if seen as outlined - should give way to a sharp rally into mid-Summer of this year. In turn, that rally will eventually peak the larger 310-day cycle, for what is anticipated to be a bigger percentage decline into the late-2024 to early-2025 window.
Until proven otherwise the next correction phase of our 310-day cycle is favored to end up as countertrend. With that, a late-2024 to early-2025 bottom with this cycle - if seen as noted - should give way to another sharp rally into what (tentatively) looks to be next Summer, before topping the next larger cycle, the four-year component.
The Four-Year Cycle in Gold
Our largest-tracked cycle for the Gold market is the four-year wave, which last bottomed back in October, 2022.
Here again is that four-year cycle in Gold:
As mentioned above, with the position of this four-year cycle (i.e., higher into mid-to-late 2025), the next correction phase of the smaller 310-day component is expected to end up as countertrend. If correct, what follows should be a push back to higher highs into the Summer of next year (or later) before topping this larger-degree wave.
In terms of price, we recently confirmed an upside target for this four-year cycle, giving us a precise level that we expect to reach going forward - with the exact details of this target posted in our Gold Wave Trader market report.
For the longer-term outlook, once this four-year wave tops in Gold, we would expect to see a sharp decline - something in the range of 20-30% off the top, likely playing out into the late-2026 timeframe. Having said that, it is too early to speculate too much in regards to this four-year cycle, though we should know more as we get closer to next Summer.
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3 weeks ago
Gold Continues to Search For Floor
By: Christopher Lewis | June 10, 2024
• The gold market bounced slightly in the early hours of Monday, as we are currently sitting on a major support level that people have been paying attention to.
Gold Markets Technical Analysis
The gold market rallied slightly during trading on Monday as we tried to recover from the absolute brutal beatdown that was seen on Friday. We are hanging around the $2,300 level, and this is an area that I think will continue to be crucial. The 50-day EMA sits just above as well, so we will have to pay attention to that, and if we can clear it, I think that gives gold the momentum or possibility of at least consolidating in this area that it’s been in, perhaps allowing the market to rise another $100. On the other hand, if we turn around and break down below the $2,280 level, that could open up more selling. That does not necessarily mean that I want to short the gold market.
It just means that I’ll be looking to buy it at lower levels. With this being the case, I do think we are at a major inflection point and the next 24 hours could really give us a lot of momentum in one direction or the other. Keep in mind that Wednesday is the FOMC meeting in the United States so that of course will have its own influence on the market so it could be a very strange and choppy week. Nonetheless, we are still very much in an uptrend despite the fact that the candlestick on Friday was horrific to say the least.
With that in mind, I will still look for buying opportunities until we break the trend, which I don’t see happening until at least the 200 day EMA, which is closer to the $2,150 level below.
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3 weeks ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | June 8, 2024
NY Gold Futures closed today at 23250 and is trading up about 12% for the year from last year's settlement of 20718. Presently, this market has been rising for 7 months going into June suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. Noticeably, we have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
From a perspective using the indicating ranges on the Daily level in the NY Gold Futures, this market remains moderately bearish position at this time with the overhead resistance beginning at 23351 and support forming below at 22943. The market is trading closer to the resistance level at this time.
On the weekly level, the last important high was established the week of May 20th at 24542, which was up 14 weeks from the low made back during the week of February 12th. We have seen the market drop sharply for the past week penetrating the previous week's low and it closed beneath that low which was 23338. This was a very bearish technical indicator warning that we have a shift in the immediate trend. We are trading below the Weekly Momentum Indicators warning that the decline is very significant and we need to pay attention to the timing and reversals. When we look deeply into the underlying tone of this immediate market, we see it is currently still in a weak posture. Immediately, this decline from the last high established the week of May 20th has been important closing sharply lower as well. Before, this recent rally exceeded the previous high of 24488 made back during the week of April 8th. That high was likewise part of a bullish trend making higher highs over the week of January 29th. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action as well as trend, long-term trend, and cyclical strength. Looking at this from a wider perspective, this market has been trading up for the past 5 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 18 months since the low established back in November 2022.
Critical support still underlies this market at 19950 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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4 weeks ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | June 8, 2024
• Following futures positions of non-commercials are as of June 4, 2024.
Gold: Currently net long 237.3k, up 717.
After essentially hugging the 50-day for 10 consecutive sessions, gold sliced through the average on Friday. For the week, it declined 0.9 percent to $2,325/ounce. A loss of $2,300 – which seems imminent in the sessions ahead – will open the door toward horizontal support at $2,240s.
Earlier, gold printed a fresh high of $2,454 on May 20th before going the other way. The metal has come a long way. Last October, it ticked $1,824 and was at $1,996 this February. It is healthy to digest these gains by unwinding the overbought condition gold is in – the weekly in particular.
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4 weeks ago
Gold Failed Bullish Breakout Sparks Volatility
By: Bruce Powers | June 7, 2024
• Gold's failed breakout led to a sharp selloff, breaking key supports and testing the 2,298-2,301 zone.
Volatility in gold spiked on Friday following a failed attempt to hold new trend highs reached earlier in the trading session. Notice that resistance was seen at 2,388, just under a top trend channel line. The subsequent selloff persisted throughout the day with gold breaking below the 2,315-swing low support from earlier this week. It is on track to end with a long red candle and will likely close near the lows of the day and below the prior interim swing low.
Testing Support at 50% Retracement
With the day’s low of 2,301, at the time of this writing, gold is testing support of another top trend channel line that can be combined with the 50% retracement at 2,298. That is a possible support zone and so far, it is stopping the descent. It may continue to do so in the short-term.
However, the drop today took the price of gold below the 50-Day MA, and it is on track to end Friday below it, thereby confirming a breakdown. The most recent swing low at 2,277 is a key price level as those low forms the price structure of the uptrend. If it is broken the characteristics of the trend begin to alter and the chance for a deeper or prolonged correction increases.
Failed Weekly Breakout Points to Lower Prices
Today’s price action sets up a failed weekly bullish breakout that was triggered on Thursday. The sharpest moves can come from failed patterns. That dynamic is now evident in gold as seen in today’s sharp bearish reversal. The stage is set for a continuation of a falling ABCD pattern that was confirmed by today’s drop below 2,315. An initial target is at 2,252, and the next extended target is around 2,215. Notice that the lower target aligns with a prior trend breakout area and the 78.6% Fibonacci retracement at 2,211.
The rising trend channel is also a concern. On the recent new highs gold was attempting to breakout of a rising parallel trend channel. A drop below today’s low will confirm the beginning of a breakdown back into the channel. Once that happens, the chance of an eventual drop to the lower line of the channel increases.
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4 weeks ago
Gold Summer Doldrums ‘24
By: Adam Hamilton | June 7, 2024
Gold, silver, and their miners’ stocks suffer their weakest seasonals of the year in early summers. With traders’ attention normally diverted to vacations and summer fun, interest in and demand for precious metals usually wane. Without outsized investment demand, gold tends to drift sideways to lower dragging silver and miners’ stocks with it. Long feared as the summer doldrums, they can offer good buying opportunities.
This doldrums term is very apt for gold’s traditional summer predicament. It describes a zone surrounding the equator in the world’s oceans. There hot air is constantly rising, spawning long-lived low-pressure areas. They are often calm, with little prevailing winds. History is full of accounts of sailing ships getting trapped in this zone for days or weeks, unable to make headway. The doldrums were murder on ships’ morale.
Crews had no idea when the winds would pick up again, while they continued burning through their limited stores of food and drink. Without moving air, the stifling heat and humidity were suffocating on those ships long before air conditioning. Misery and boredom grew extreme, leading to fights breaking out and occasional mutinies. Being trapped in the doldrums was viewed with dread, it was a very trying experience.
Gold investors can somewhat relate. Like clockwork trudging through early summers, gold usually starts drifting listlessly sideways. It often can’t make significant headway no matter what trends looked like heading into June, July, and August. As the days and weeks grind on, sentiment deteriorates markedly. Patience is gradually exhausted, supplanted with deep frustration. So plenty of traders abandon ship, capitulating.
June and early July in particular have often proven desolate sentiment wastelands for precious metals, devoid of recurring seasonal demand surges. Unlike most of the rest of the year, the summer months simply lack any major income-cycle or cultural drivers of outsized gold investment demand. Yet 2024’s summer setup is unprecedented, with warring bearish and bullish forces to drive gold’s coming price action.
Following its remarkable breakout surge to streaks of new nominal records, gold has been extremely overbought in recent months. That greatly increases the chances for a rebalancing selloff, which weak summer seasonals could exacerbate. Yet gold’s mighty gains haven’t been fueled by its normal drivers, speculators buying gold futures and American stock investors buying shares in world-dominant gold ETFs.
Instead Chinese investors and central banks have been running point on gold’s upleg. Their strong buying could continue this summer on momentum-chasing psychology. Sooner or later that could push gold high enough for long enough to start attracting back its traditional constituency. Their buying will really amplify gold’s upleg, and their return is almost certainly still coming. But will it get underway this summer?
Rather than getting discouraged if that tarries, traders should embrace gold’s summer doldrums. Healthy pullbacks are essential for maximizing uplegs’ longevity and ultimate gains, rebalancing sentiment before greed grows excessive enough to prematurely slay uplegs. These selloffs also offer good mid-upleg buying opportunities. So instead of checking out in early summers, traders should be researching great stocks.
Quantifying gold’s summer seasonal tendencies during bull markets requires all relevant years’ price action to be recast in perfectly-comparable percentage terms. That is accomplished by individually indexing each summer’s gold prices to their last closes before, which are May’s final trading days. They are set to 100, then all summer gold-price action is recalculated off those common indexed baselines.
So gold trading at an indexed level of 110 simply means it has rallied 10% from May’s final close, while 95 shows it is down 5%. This methodology renders all bull-market-year gold summers in like terms. That’s necessary since gold’s price range has been so vast, from $257 in April 2001 to $2,424 in May 2024. That span encompassed two secular gold bulls, the first soaring 638.2% over 10.4 years into August 2011!
Following that mighty juggernaut, gold consolidated high then started correcting into 2012. But the yellow metal didn’t enter formal bear territory down 20%+ until April 2013. That beast mauled gold on and off over several years, so 2013 to 2015 are excluded from these seasonal averages. Gold finally regained bull status powering 20%+ higher in March 2016, then its modest gains grew to 96.2% by August 2020.
Another high consolidation emerged after that, where gold avoided relapsing into a new bear despite a serious correction. Later the yellow metal started powering higher again, coming within 0.5% of a new nominal record in early March 2022 after Russia invaded Ukraine. So 2016 to 2021 definitely proved bull years too, with 2022 really looking like one early on. Then Fed officials panicked, unleashing market chaos.
Inflation was raging out of control thanks to their extreme money printing. In just 25.5 months following the March 2020 pandemic-lockdown stock panic, the Fed ballooned its balance sheet an absurd 115.6%! That effectively more than doubled the US monetary base in just a couple years, injecting $4,807b of new dollars to start chasing and bidding up the prices on goods and services. That fueled an inflation super-spike.
With big inflation running rampant, Fed officials frantically executed the most-extreme tightening cycle in this central bank’s history. They hiked their federal-funds rate an astounding 450 basis points in just 10.6 months, while also selling monetized bonds through quantitative tightening! That ignited a huge parabolic spike in the US dollar, unleashing massive gold-futures selling slamming gold 20.9% lower into early September.
That was technically a new bear market, albeit barely and driven by an extraordinary anomaly that was unsustainable. Indeed gold soon rebounded sharply, exiting 2022 with a trivial 0.3% full-year loss. Gold kept on powering higher, reentering bull territory up 20.2% in early February 2023! So I’m also classifying 2022 as a bull year for seasonality research. Gold’s modern bull years include 2001 to 2012 and 2016 to 2023.
When all gold’s summer price action from these modern gold-bull years is individually indexed and thrown into a single chart, this spilled-spaghetti mess is the result. 2001 to 2012 and 2016 to 2022 are rendered in yellow. Last summer’s action is shown in light-blue for easier comparison with this summer. Seeing all this perfectly-comparable indexed summer price action at once reveals gold’s center-mass-drift tendency.
These summer seasonals are further refined by averaging together all 20 of these gold-bull years into the red line. Finally gold’s summer-to-date action this year is superimposed over everything else in dark-blue, showing how gold is performing compared to its seasonal mean. Just entering the summer doldrums, the yellow metal is meandering slightly above trend as of mid-week. That’s tracking normal doldrums behavior.
After a quarter-century studying gold, trading gold stocks, and writing financial newsletters about all of it, I usually have some idea of how a particular summer will play out. But summer 2024 looks like a coin toss, with similar odds gold pulls back or rallies! So as a few of our newsletter trades have been stopped out with big realized gains, we haven’t been redeploying. A summer-doldrums pullback would leave better buys.
But the great majority of our gold-stock trades in this upleg remain intact, with big-to-huge unrealized gains. We tightened their trailing stop losses somewhat, but are keeping our trading books as full as possible in case gold surges again. Usually the early-summer outlook for gold is moderately bearish, but this year it could go either way. Silver and gold stocks will amplify its moves, acting like gold sentiment gauges.
As March dawned, gold’s remarkable breakout surge ignited. A top Fed official hinted at the possibility of more quantitative-easing money printing, and gold was off to the races. From late February to mid-April, gold blasted a powerful 17.7% higher! Gold closed at nominal record highs on nearly 4/7ths of that short span’s trading days. But rallying so far so fast left gold extremely overbought, warning of a sizable selloff.
Over the past five calendar years, that extremely-overbought threshold has started when gold soars so fast it stretches over 15% above its baseline 200-day moving average. At worst in mid-April, gold soared to 1.188x its 200dma! Gold hadn’t been more overbought by that metric since August 2020, 3.7 years earlier. And with gold mostly consolidating high since instead of selling off, that condition has proven chronic...
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4 weeks ago
Gold Triggers Weekly Bullish Reversal, Targets Higher Levels
By: Bruce Powers | June 6, 2024
• Gold's rally above 2,364 signals a bullish reversal, aiming for 2,487, with the 20-Day MA now serving as crucial support during pullbacks.
Gold triggers a weekly bullish reversal on Thursday with a rally above last week’s high of 2,364. A daily close above that price level will confirm the breakout. Once confirmed, the chance for further strengthening improves. At the time of this writing gold had reached a high of 2,378 for the day. Also, the 20-Day MA, which has acted as resistance recently, was busted to the upside. The 20-Day line is now at 2,362. If it holds as support during pullbacks, gold should be ready to continue its way higher.
Upside Breakout of Consolidation
Today’s advance triggered a breakout of a falling flag type pattern marked by two declining parallel lines on the chart. It reflects similar price action as seen in a falling bullish wedge pattern. Since a swing low is now indicated at 2,315, a rising ABCD pattern has been added to the chart. It provides an initial target of 2,487. That is where the price advance seen in the CD leg of the pattern matches the move in the AB portion. Once price symmetry is matched a pivot level is identified. That 2,487-price target area is confirmed by several Fibonacci targets. However, there are lower Fibonacci targets as well at 2,462 and 2,480 that are derived from longer Fibonacci measurements.
20-Day MA Should Now Mark Trend Support
The relationship with the 20-Day MA will now take on a greater significance as it should act as support during weakness since today’s breakout is decisive. Nonetheless, the strength or weakness of the day’s close will provide greater clarity. Also, Thursday’s low of 2,353 is a near-term support level to keep an eye on. A break below it may follow a drop below the 20-Day line, if it was to occur.
50-Day MA Also Important
Support was seen around the 50-Day MA over the past six days with a swing low during the period at 2,315. It should also be watched during pullbacks. If gold stays above the 50-Day line, it is signaling higher prices and a continuation of the bull trend. On a monthly basis, for the month of June gold has been trading inside the trading range from May. It could continue to do so throughout the month rather than clearly progressing higher from current price levels.
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4 weeks ago
Gold Continues to Attempt a Move Higher
By: Christopher Lewis | June 6, 2024
• The gold market rose a bit in the early hours on Thursday, as the markets continue to look around the world at a lot of danger. Furthermore, there is a lot of longer-term momentum in this market that will influence decisions.
Gold Markets Technical Analysis
The gold market initially rallied during the trading session on Thursday, but then gave back gains. The ECB cut rates, so we’ve seen a lot of noise and therefore we have to question whether or not gold really starts to take off due to the fact that it looks like central banks around the world are starting to cut. The $2,400 level above is a major round figure that a lot of people will be paying attention to. So, I look at that as a potential target.
Short-term pullbacks are buying opportunities from what I see, especially with the 50-day EMA underneath offering quite a bit of support just above the crucial and obvious $2,300 support level. This is a market that has been very noisy as of late, but the recent consolidation looks to be giving way to a breakout, so I do believe that we will continue to grind higher. I don’t think it’s going to be an easy move. I just think that it’s a move that is destined to happen.
Short-term dips are buying opportunities and it’s not until we break down below 2275 that I’d be concerned about the short-term trend and even then, I would be looking for buying gold somewhere closer to the 2150 dollars level, which also features the 200 day EMA so that will of course be very important to pay attention to. Nonetheless, this is a market that I think favors the upside regardless and I would be very surprised to see us break down towards that region.
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4 weeks ago
Gold Bullish Potential Amid Consolidation and Key Support
By: Bruce Powers | June 5, 2024
• Gold remains in a nine-day consolidation, with key levels at 2,364 and 2,315, showing bullish potential on the weekly chart.
Gold remains in a tight consolidation pattern as it has for the past nine days. The high of the range is at 2,364 (C), also a weekly high, and the low is 2,315. On Wednesday gold advanced to a three-day high of 2,357, once again testing resistance at the 20-Day MA. At the time of this writing gold is on track to close at its highest daily closing price in six days. An advance above 2,360 will provide an earlier bullish signal than a rise above 2,364.
50-Day Moving Average Trend Support
The 50-Day MA has been representing an area of support over the past week. If this week’s low of 2,315 fails to maintain support, gold is heading towards a retest of the recent swing low of 2,277. A break below there has it heading towards the earlier breakout levels at 2,212 and 2,195. An interim target is 2,239, which is the completion of a falling ABCD pattern. That target is a potential pivot where support might be seen. The extended ABCD target is down at 2,205, within the 2,212 to 2,195 price zone.
Weekly Bullish Breakout Above 2,364
An advance above the 2,364-price level also triggers a weekly bullish reversal from last week’s relatively narrow range week, if it happens before the end of the week. So far this week, gold is showing signs of strengthening on the weekly chart. If it maintains strength, it will close the week in the green with a bullish weekly setup. Maintaining support around the 50-Day MA is going to save the trend in gold. The purple 20-Day MA defined dynamic resistance of the upswing from the February 29 bullish breakout, while the new advance may use the 50-Day line as dynamic trend support.
A breakout above last week’s high does not mean that gold starts going straight up again. Although it may do that, the more likely scenario following the recent 23.5% rally, is further consolidation near the recent highs. Another critical price level on the way up will be 2,431, a prior record high from April 12. Resistance may be seen there again, but there is also a good chance that the price of gold breaks out through the price zone as it heads higher.
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4 weeks ago
Gold Holds 50-Day MA Support Amid Downtrend Concerns
By: Bruce Powers | June 4, 2024
• Despite holding support at the 50-Day MA, gold's recent trend of lower weekly highs and lows suggests caution for investors.
Gold holds support around the 50-Day MA for the fourth day in a row on Tuesday. It remains sandwiched between resistance around the purple 20-Day MA and the 50-Day line for support. Although gold has dipped below the 50-Day line intraday in the last two days, it has ended the sessions at or above the 50-Day line. Watch where it ends today to see if there is a change in the recent closing pattern. If the daily close is lower relative to the 50-Day line than what has been seen to date, it may be signaling further weakness before the retracement is complete.
Weekly Chart is Bearish
Nevertheless, the weekly chart is taking a more bearish tone. This week triggered a third consecutive lower weekly low. The week’s low of 2,315 is lower than last week’s low of 2,321, which is lower than the prior week’s low of 2,325. In addition, this week and last week’s highs are each lower than the prior week. In other words, there is a series of lower weekly highs and lower weekly lows established on the weekly chart, which defines a downtrend. That will start to change if this week’s high gets above last week’s high of 2,364 before the end of this week.
Price Support Areas to Watch
This week’s low of 2,315 is key near-term support. A decisive drop below that level has gold heading towards potential support around a top trend channel line at approximately 2,299 and then the 50% retracement zone at 2,289. Note that the recent swing low found support in early-May at 2,277. If that price level is eventually broken, then the 2,239-price zone becomes the net lower target (D). That target reflects price symmetry within a falling ABCD pattern, as marked on the chart. Further down is the second target for the ABCD pattern at 2,205. It is part of a price support zone from 2,208 to around 2,154.
Signs of Strength Above 2,364
Gold will be showing signs of strength rather than weakness with a rally above the most recent swing high (C) of 2,364, which is also last week’s high. Until then, downside risk remains. A daily close above 2,364 will further confirm strength and more so on a rally and close above the 2,384 daily high from May 23.
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1 month ago
NY Gold Futures »» Weekly Summary Analysis
By: Marty Armstrong | June 1, 2024
NY Gold Futures closed today at 23458 and is trading up about 13% for the year from last year's settlement of 20718. Up to now, this market has been rising for 7 months going into June suggesting that this has been a bull market trend on the monthly time level which has been confirmed by electing all of our model's long-term Bullish Reversals from the key low.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2022 and 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The NY Gold Futures has continued to make new historical highs over the course of the rally from 2015 moving into 2024. However, this last portion of the rally has taken place over 9 years from the last important low formed during 2015. We have elected four Bullish Reversals to date.
This market remains in a positive position on the weekly to yearly levels of our indicating models. Pay attention to the Monthly level for any serious change in long-term trend ahead.
Looking at the indicating ranges on the Daily level in the NY Gold Futures, this market remains neutral with resistance standing at 23490 and support forming below at 23405. The market is trading closer to the resistance level at this time.
On the weekly level, the last important high was established the week of May 20th at 24542, which was up 14 weeks from the low made back during the week of February 12th. Afterwards, the market bounced for 14 weeks reaching a high during the week of May 20th at 23263. Since that high, we have been generally trading down to sideways for the past week, which has been a sharp move of 4.905% in a reactionary type decline. Nonetheless, the market still has not penetrated that previous low of 19964 as it has fallen back reaching only 23338 which still remains 16.90% above the former low.
When we look deeply into the underlying tone of this immediate market, The broader perspective, this current rally into the week of May 20th has exceeded the previous high of 24488 made back during the week of April 8th. This immediate decline has thus far held the previous low formed at 19964 made the week of February 12th. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is neutral on our weekly Momentum Models warning we have overhead resistance forming and support in the general vacinity of 23006. Additional support is to be found at 23046. Looking at this from a wider perspective, this market has been trading up for the past 5 weeks overall.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are declining at this time with the previous high made 2020 while the last low formed on 2023. However, this market has rallied in price with the last cyclical high formed on 2023 and thus we have a divergence warning that this market is starting to run out of strength on the upside.
Interestingly, the NY Gold Futures has been in a bullish phase for the past 18 months since the low established back in November 2022.
Critical support still underlies this market at 19950 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.
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1 month ago
Gold CoT: Peek Into Future Through Futures, How Hedge Funds Are Positioned
By: Hedgopia | June 1, 2024
• Following futures positions of non-commercials are as of May 28, 2024.
Gold: Currently net long 236.6k, up 6.8k.
Gold was up 0.5 percent for the week but could have done better. At Tuesday’s high, gold rallied as high as $2,386 but finished the week at $2,346/ounce. The metal has essentially gone sideways the last six sessions just above the 50-day ($2,335).
It increasingly feels like gold is taking a breather before beginning a process of digesting the recent gains. Last October, the yellow metal ticked $1,824 and was at $1,996 this February. On May 20th, gold reached $2,454.
Once the 50-day gives way, there is decent support at $2,240s.
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1 month ago
Gold Drops Below Key Levels, Signals Further Weakness
By: Bruce Powers | May 31, 2024
• Testing the 50-Day MA, gold hits new retracement low at 2,321, indicating potential for continued bearish momentum.
Following a successful test of resistance around the 20-Day MA gold turns down and attacks its 50-Day MA. At the time of this writing gold has reached a low for the day of 2,321 and it continues to trade near the lows. Further, today’s low is a new retracement low as the previous level of 2,322 was busted. It looks like gold intends to test lower price levels unless strong support is seen soon.
Next Possible Support Zone
The next potential support area may be seen around a top rising channel line that is currently near 2,298. If gold drops further below the 50-Day MA and stays below it, the recent swing low of 2,277 is at risk of being broken. There are several lower price areas marked on the chart but let’s start by considering a developing falling ABCD pattern.
A bearish continuation was triggered on Wednesday following a two-day bounce. Subsequently, support was seen around the 50-day line leading to a retest of resistance today and yesterday. Since resistance was followed by a decline today, it looks like the initial target from the pattern at 2,239 could be reached eventually.
Return to Previous Breakout Levels?
Further down is a potentially more significant price zone as it was previously trend highs of a small consolidation pattern. When combined with Fibonacci price levels a potential support zone from 2,207 to roughly 2,195 is indicated. A breakout of that consolidation was the most recent pattern breakout prior to the April 12 swing high. Therefore, that price area would be the maximum decline that may test previous resistance as support.
Weekly Chart is Bearish
The weekly chart is supportive of a deeper retracement as this week is likely to end below last week’s low of 2,325, thereby confirming a weekly bearish continuation signal. It follows a bearish candle from last week when gold also closed near the lows of the week. This means the last two weeks have had a bearish reaction to the new trend high last week. In other words, a failed breakout. Failed patterns frequently lead to sharp moves in the opposite direction.
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