E Gold Prices Are Overdue For A Bounce, But Prices Continue To Trade Lower

Gold prices are overdue for a bounce, but prices continue to trade lower. Persistent trends like this can sometimes continue longer than most expect. Miners broke sharply and should continue to drop for a few more trading days before attempting a rally.

There isn’t enough data to support further declines into an 8-year cycle low but the evidence in mounting. Silver prices breaking sharply below the $15.83 level will void the positive divergence advocating for a move below the 2015 $13.62 low.

-US DOLLAR- The dollar closed well above the trendline and the December 8th 99.25 low is confirmed.

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-GOLD-Prices continued lower into the close reaching $1,140. No signs of a reversal, and it would take a close above the 10-day EMA to signal a potential bottom.

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-SILVER- Prices need to break below the blue trendline to setup a drop below $16.15. Prices dropping below $15.83 will increase the odds of an 8-year cycle drop below the 2015 $13.62 low.

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-TLT- Prices closed sharply below the green trendline. The next support level arrives at 115 (200-week MA) and then 110 (2015 low).

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-XAU- Prices topped at the 16-day marker and decisively broken below the trendline. Prices should head lower for a few more trading days before attempting a rally.

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-GDX- Prices crashed into the close and will likely head lower for a few more trading days before attempting a rally.

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-GDXJ- Junior miners crashed through the lower triangle boundary on large volume. Another wave of selling has begun.

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-WTIC- Oil crashed back below the red trendline and the move to $54.51 may have been a false breakout. A close below $50.75 will signal that a correction has begun.

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I’m changing the buy signals to neutral until we see significant signs of bottoming.


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Joe Economy 3 years ago Member's comment

Gold continues its decline dropping down another 1% again today and now trades at around the 1129 level. It seems that there is an inverse relationship between the strength of the dollar and the upwards trend of the US majors, and the price of gold. Gold will continue to be the the commodity of safety but not necessarily the first choice for investors especially when the US stock markets are outperforming. The DIA, SPY, and QQQ are all up around 0.40% today along with a strengthening dollar. USD/JPY is up about 0.75% today teasingly close to the 118 level. All this could reverse once the markets bubble bursts, and when that happens I foresee a resurgence of Gold prices. Do you agree?

AG Thorson 3 years ago Author's comment

Gold drops into a major cycle low approximately every 8-years. The last cycle low was in 2008. Prices should bottom in the first quarter of 2017, and a new bull run will begin. The dollar should make a significant top in the first half of 2017.

Louis Jackson 3 years ago Member's comment

Gold tried to get below 1140 tonight. It just seems like too much of a falling knife given what the DXY is doing. And there is not much support below this level.