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

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
Preparing For The Big Trade In Gold


 -- Published: Wednesday, 29 April 2015 | Print  | Disqus 

By Justin Smyth

The irony about the current gold market is that gold is actually slightly higher than it was two years ago in June 2013 when it made a crash low.  But many gold market pundits and the financial media have maintained their bearishness on gold for two years predicting another crash in gold.  It simply hasn't come to pass.  The reason they've maintained this popular bearish view is the gold market has been devoid of hope for years now in the depression phase.  This is where people give up hope at the bottom of a market.

sentiment_cycles

What's interesting though as the chart above points out is that the "point of maximum financial opportunity" is also the point at which people have given up on an investment.  This is a key point to realize when looking for big long term trades.  When people give up on or don't care anymore about an investment they are no longer bidding up its price.  So when fundamentals eventually turn around for an investment that nobody is interested in it creates an explosive opportunity when demand kicks back in.

From a Stage Analysis perspective we can visualize the depression phase of an investment as a Stage 1 base.  This is where hope is abandoned for an investment and supply and demand settle into balance at a low price, after a bear market Stage 4 decline.

stageanalysischart

One thing that needs to be emphasized is that the Stage 1 basing phase can last for a long time, from months to multiple years.  This is what has plagued some of those looking for a turnaround in gold over the last couple of years.  In 2014 for instance gold attempted multiple times to breakout into a Stage 2 advance but each attempt failed and gold continued to drift.  Each failed attempt disheartens the bulls and continues to plunge more and more investors into giving up which eventually is what causes a super buying opportunity when the real Stage 2 breakout finally materializes.  This is why the "bigger the base", the higher the potential for a big trade because the bulls have been washed out of the investment.

You can see on the chart of GLD below that gold has spent a lot of time since 2013 in a basing phase, but each breakout in gold has failed so far.  The parabolic advance in the U.S. dollar that started in mid-2014 actually plunged gold into another minor decline.  But gold has re-established a Stage 1 base even with the dollar continuing to surge.  Now gold is once again threatening the 30-week moving average with potential to move into a new Stage 2 advance.

gldstage1

What lends support that this upcoming Stage 2 breakout in gold could be the "real deal" is that gold has broken out into a new Stage 2 bull market in foreign currencies.  This underlying strength in gold has been masked by a mania in U.S. dollar, but foreign holders of gold are already experiencing a new bull trend.

gldudn

Gold stocks priced in foreign currencies have established a massive Stage 1 base that has huge potential for a new bull market.  Also if you take a look at gold mining stocks on the Canadian TSX exchange many more have started new bull markets already then U.S. listed gold stocks, which speaks to the weak Canadian dollar and the breakout of gold in Canadian dollar terms.

gdxudn

One final thing to note is that the current Stage 1 base in the gold market is one of the biggest Stage 1 bases in the financial markets right now, and in fact it's one of the only Stage 1 bases.  Which means that as far as trading opportunities go the gold market is in line to fire off a big opportunity at some point.  And without other markets in Stage 1 bases transitioning into new bull markets to attract capital the gold market should gain a lot of attention.

Checkout my new Stage Analysis Screening Tool at: http://screener.nextbigtrade.com

Twitter: @nextbigtrade

The original article and much more can be found at: http://www.nextbigtrade.com

The views and opinions expressed are for informational purposes only, and should not be considered as investment advice. Please see the disclaimer.


| Digg This Article
 -- Published: Wednesday, 29 April 2015 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com 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 GoldSeek.com. 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


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, 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 GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, 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.