Gold Daily Chart Review

The Gold crash of late 2016 has just about been completely retraced and gold is finding tough resistance at the $1360 price level. Many times I have mentioned the $1375 price level as the price to beat to confirm the 2016 crash as a correction. We’re still about $25 away from the $1375 breakout and I’m confident gold will still clear $1375 with flying colors.  Wild moves in one direction and then a wild move in the other, seems to be the normal state of affairs.

I show a simplified “C” wave still in progress, but they are all diagonals, which is what we should expect for a “C” wave bullish phase.  All this is still pointing gold to the $1500-$1600 price range. A short term correction may still be in progress so I expect some violent moves as gold gets closer to a breakout situation.  Emotional investors jump in and out of gold for “safe-haven” reasons, so based on that it is impossible to know when investors suddenly get the urge to “buy”.

In the end it will be the US dollar bear market that will keep gold very active and until the US dollar is ready to charge back into a full bull market, the upward pressure on gold should remain.  It’s when this daily chart goes vertical, we have to wake up, as vertical moves do produce big bearish phases.

The biggest threat will come from stocks, when they start on bigger counter rallies. Gold and gold stocks will always find competition from the general stock markets and the idea is to spot any reversal before it happens, not after. It is the mass media that are always late in recognizing a trend change as the fundamentals are lagging indicators, not leading indicators.

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