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

SWOT Analysis: Gold Equities Have Room to Run…
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

Precious Metals Update Video: Gold weekly chart shows upside bias
By: Ira Epstein

Here's How to Tell Whether Bond Mania Is Out of Gas
By: Rick Ackerman, Rick's Picks

Asian Metals Market Update: August-19-2019
By: Chintan Karnani, Insignia Consultants

What I Learned at Camp Kotok
By: John Mauldin

COT Gold, Silver and US Dollar Index Report - August 16, 2019
By: GoldSeek.com

Gold Miners’ Q2’19 Fundamentals
By: Adam Hamilton, CPA, Zeal Research

 
Search

GoldSeek Web

 
Bull Trap or Bottom in Gold and Gold Stocks?


 -- Published: Friday, 18 September 2015 | Print  | Disqus 

By Jordan Roy-Byrne, CMT

As we know, Gold and gold mining stocks have been trapped in a bear market that has been severe in both price and duration. It is seemingly a “forever” bear market as rebounds and recoveries have been followed by lower prices and more devastation. The Fed-induced strength of this week is giving bulls some hope. For the bulls, this strength needs to be duplicated in the weeks ahead or it would be another false alarm. While a new bull market is inevitable, we do not see it as imminent.

First I will start with the miners. We plot a weekly candle chart of GDXJ as it is the strongest and figures to lead the eventual recovery. GDXJ is reversing today. That is bearish though it is not entirely reflected in the weekly chart. GDXJ, trading around $21 faces a confluence of major resistance around $23 to $24. Multiple lines of resistance and the 200-day moving average converge there. While GDXJ has formed a good base, its potential recovery will remain questionable or doubtful unless it can make a weekly close above $23 to $24 within the next few weeks. Bulls need to see GDXJ explode through that resistance or it could roll over again.

Sep182015GDXJwed

The prognosis for Gold is even simpler. Its key resistance and pivot point over the past 12 months is $1155 to $1160. For the bulls, Gold needs to break above that barrier with a few strong weekly closes. If it cannot, then the strength of the past few days will be another false alarm.

Sep182015Goldwed

The recent recovery in global equities may have ended yesterday (Thursday). The S&P 500 rebounded back above its 400-day moving average (2003) to 2020 before reversing to close below its 400-day moving average. It remained below its 50-day moving average the entire time. It is down another 1.3% today. Other markets such as the Nasdaq, Emerging Markets (EEM) and Russell 2000 made the same reversal and at their 50-day moving averages. They are down more than 1% today.

Further weakness in global equity markets should be bullish for precious metals in the sense that it could act as a catalyst for the start of the next bull market. In the chart below we plot Gold and gold miners (GDXJ) against the all country weighted index (ACWI). It is important to note, the precious metals complex remains in a downtrend against equities. It has not broken out yet but figures to have a good chance to do so in the months ahead.

Sep182015GoldvsStocksed

If Gold and gold miners have bottomed then they should explode through upside resistance over the next few weeks. Gold would need to push above $1160 and more importantly, GDXJ would close above resistance at $23-$24. While I do not expect this to occur, it is a scenario we should keep in mind.

The other scenario is this Fed-induced rebound in precious metals fizzles out and precious metals join global equity markets in a selloff. Although that is bearish, it would be bullish to see Gold decline less than global equity markets. That scenario, given how Gold fared relative to equities in the August selloff, is plausible. Gold traders and investors need to be careful here and put their portfolios in position to take advantage of the next buying opportunity, which could mark the end of the bear. As we navigate the end of this bear market, consider learning more about our premium service including our favorite junior miners which we expect to outperform into 2016.  

Jordan Roy-Byrne, CMT

Jordan@TheDailyGold.com


| Digg This Article
 -- Published: Friday, 18 September 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.