LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page >> News >> Story  Disclaimer 
Latest Headlines

Precious Metals Update Video: Gold consolidating
By: Ira Epstein

Gold & Jackson Hole: No Cause For Concern
By: Stewart Thomson, Graceland Updates

GDP Ainít What it Used to Be!
By: David Haggith

The Case for Gold Keeps Getting Stronger As Negative Interest Rates Spread
By: Clint Siegner, Money Metals

Precious Metals Update Video: Gold consolidating
By: Ira Epstein

GoldSeek Radio: Gerald Celente and Bill Murphy
By: Chris Waltzek, GoldSeek Radio

SWOT Analysis: Gold Equities Have Room to RunÖ
By: Frank Holmes, US Funds

Technical Scoop: 200 Years - Gold/Gold Ratio, Precious Metals, equity, bond market updates and more
By: David Chapman

Gold Set to Correct but Internals Remain Bullish
By: Jordan Roy-Byrne CMT, MFTA

The Market Has Gone Nowhere In The Last Twelve Months
By: Avi Gilburt


GoldSeek Web

Ira Epstein's Weekly Metal Report

-- Posted Thursday, 19 April 2012 | | Disqus


Gold prices in the short term continue to look overall bearish. Old news, which is being twisted into new headlines, is once again front and center. Spain, Italy, Iran, the US economy, quantitative easing and the old economic issues in America, Europe and China remain the dominant stories of the day.

Spain had taken over news headlines as the markets focused on the interest rates Spain is being forced to pay to borrow funds. Anything over 6% in ten year Spanish notes is considered the line in the sand. Luckily Spain did not have to pay that today. Anything beyond 6% is what the market considers to be too high of an interest rate for Spain to be able to pay and turn its economy around. Interest rates poked their head over that amount on Tuesday, but todayís action went at 5.4%. This amount is still 25 bps more than Spain paid several months ago.


IMFs Legarde said today that there is no need for IMF help for Spain at the moment, but she made it clear that help is clearly going to be there if needed. A new problem now surfacing is a downgrade by Moodyís of French sovereign debt. The rumor of this started via a research note released Wednesday by Citi analysts who said they believed Moody's Investors Service Inc. would put France's triple-A rating "on review for a possible downgrade by the autumn." Autumn is around the corner.


Since my last report, gold has stayed range bound. The range of roughly $1680 down to todayís low of $1631.2 is what Iím talking about. Copper prices have been collapsing. This collapse leads me to believe that inflation is not a theme as copper is used in construction of infrastructure of practically all types.  Roads, buildings, housing and so on. With prices in a tailspin itís hard to argue inflation in metals.


Energy prices havenít offered much support to gold as they too have stayed range bound. Iran also isnít much of a factor since they were just given another 5-weeks before another meeting with them is set to take place.


Last, the US economy is not showing the robustness it did last quarter. The NY Fed and Philly Fed Reports both recently released showed slowdowns in their respective regions. Today we saw the number of Initial Weekly Jobs Claims decline, but the decline is a camouflage since the decline is from a sharp revision higher. Last week's expectation was for a number of 355K. Instead, the number came out at 380K. That number was revised today to 388K and from there we got a 2K reduction down to 386K today. So that leaves open the question of whether the job bump seen last month had to do with record warm weather, which pulled job employment forward. If so and we donít see job claims decline, the Fed would have the ammunition it needs to enact another round of stimulus, which would be bullish gold.


What gold is lacking right now is a story.


Seasonal Charts


The chart below is published with permission of the Moore Research Center, Inc.

For simplicity purposes, I have only published what a Bull Year looks like given that thereís no reason to yet consider a Bear Year in my opinion.



The ďseasonal chartĒ shows the June contract sideways to lower prices in April, leading to a rally in May and break into June.



Monthly Chart



The Monthly chart pattern above is neutral to bearish as the Swingline Study continues to make lower highs (red arrows) and lower lows (yellow arrow). My guess is that if the market continues to work lower, it will find initial support against the 18-Month Moving Average of Closes, 1580.9.


In order for the current monthly chart pattern to turn its Swingline Study neutral (the study that shows the highs and lows on the above chart) prices would have to take out this weekís high of 1682.8. Until that occurs, I look for prices to work lower.


The one positive here is that very long term traders who use moving averages are probably looking at the 18-Week Moving Average of Closes and thinking that prices havenít weakened enough in the whole time frame shown, to even get down and touch this chart study. That in itself is bullish and probably has longer term traders closing watching prices to see if this moving average is hit.  


Weekly Chart


The Weekly Chart is bearish. Prices are in a price pattern of lower highs, lower lows and are trading under the 18-Week Moving Average of Closes.  It would take a move over 1680.1 on this chart to reverse this pattern.


This means that the Swingline Study is bearish on both the Monthly and Weekly Chart patterns and that the Weekly Chart, which is of one of a shorter term then the Monthly Chart, is clearly in the Bear camp.



Daily Chart


The Daily Chart is the shortest term chart I use and is the one most traders use.


On the Daily Chart shown below I added the momentum study, Slow Stochastics and an algorithm study that looks for support and resistance zones, Bollinger Bands.


This chart is bearish as is the Weekly Chart. The Bollinger Bands have done a nice job of alerting traders to where potential support lies. 1619 is the current price level where charts support is shown.


Should prices get over 1655.2 there would be reason to believe that the chart pattern is changing to one of bullishness. However, thatís not the case at this time. In fact the current pattern is bearish given that the chart pattern is now one of lower highs and lower lows as displayed by the Swingline Study.







In my last report I said that I saw no reason to not remain bearish because prices were in and orderly downtrend. While a rally attempt did take place over the past two weeks, it failed and the current trend remains down.  

I also said in my last report that I was looking for $1580 on the downside. I think that the $1620 level now fits in better because on the Daily Chart this is the Bollinger Band Bottom. Thereís no magic to Bollinger Bands other than they offer support and resistance points as well as doing a good job of telling you when prices might be getting ahead of themselves.

Both the Weekly and Daily Charts are in downtrends. The Monthly Chart has a bearish bias due to the Swingline being in a downtrend, but prices on that chart remain over the 18-Month Moving Average of Closes, which comes in at 1580.9 and is where I thought major support in my last report would come in. That number could still be seen, but to do so means that on the Daily Chart gold would have to widen its current Bollinger Bands by breaking through the bottom band to force the band to move lower.

I donít see reason for gold to accelerate sharply down at this point, so unless something of consequence occurs, I think the Bollinger Band Bottom is all I would be playing for on this leg down.

The bigger problem is that gold doesnít have a pressing bull story going for it right now. Yes, all the problems that will in my opinion ultimately drive higher are there, but timing is important and right now the trend is down. Until the trend turns up, treat the market as short term bearish, with $1620 down to $1581 as downside targets.

If prices get over 1655.2, the game plan changes.


Futures Trading Kit and Twice Daily Updates


In is through my Twice Daily Updates, available through subscription where you can keep up with my thinking and specific entry point, stop and profit objectives for gold.


By clicking here you will be taken to my subscription page or you can go to: and look on the left hand side of the page for the link.


If youíd like more information about trading gold, simply call us at



Disclaimer: This publication is strictly the opinion of its writer and is intended solely for informative purposes and is not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is taken from sources believed to be reliable, but is in no way guaranteed. Chart data is courtesy of LGP-IraCharts. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Futures and Options on Futures trading involve risk. In no event should the content of this market letter be construed as an express or implied promise, guarantee or implication by or from The Ira Epstein Division of The Linn Group, Inc. or The Linn Group, Inc. that you will profit or that losses can or will be limited in any manner whatsoever. No such promises, guarantees or implications are given. Past results are not indicative of future performance.

-- Posted Thursday, 19 April 2012 | Digg This Article | Source:

comments powered by Disqus


Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to >> Story

E-mail Page  | Print  | Disclaimer 

© 1995 - 2019 Supports

©, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


The views contained here may not represent the views of, Gold Seek LLC, its affiliates or advertisers., Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of, Gold Seek LLC, is strictly prohibited. In no event shall, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.