The Midas Touch Consulting Report

1. Market Update

Since early July already the gold market is caught in some form of an agonizing and confusing sideways consolidation. Every time it looks like it is about to break out to the upside it's coming back down. The series of lower highs is certainly not very convincing yet typical for a consolidation. At the same time the bears are not able to push prices back below $1,300 because around that level the bulls always come back into the market and destroy the bear's work within short time. This is a tricky situation in which many swing-traders are loosing money due to the lack of a clear trend. The best solution of course would be to just wait at the sidelines until we have a clear trend back in place. Of course only in hindsight one can clearly see such a sideways pattern. At least my Gold Model is neutral and urges us to remain patient here.

But in my humble opinion the mining stocks are already finishing their correction and are a "buy" again. We bought GDX and I now recommend to add GDXJ as well.

The crypto currencies (mainly Bitcoin) are consolidating too and you should just continue to hold them.

Generally speaking we have seen rather quiet markets but I think we will get some bigger moves an certainly more volatility in the last quarter of the year..... I continue to believe that we are in a world wide crackup boom which will push all asset classes higher due to massive inflation from all the important central banks. Important note: inflation means increasing the money supply, rising prices are just the visible consequence.

2. The Midas Touch Gold Model neutral since 15th of September

Compared to last week we have the following bullish changes:
SPDR Gold Trust Holdings
GDX Gold Miners - Daily Chart
US Real Interest Rate (now -0.745%)

Here are the model's latest conclusions:
Bullish: 24th of June 2016
Neutral: 22nd of August 2016
Bullish: 6th of September 2016
Neutral: 15th of September 2016

Remember, the model is mainly a trend-following approach. Now that gold is trendless consolidating sideways since more than two months already the model will get into trouble.

3. Gold - Consolidation since early July continues

The new bull market in gold is not an easy task since early July. The bulls are still in control but hiding their true intentions while the bears do not make any progress either.

Trust me, a tricky sideways consolidation within a new up trend is nothing to worry about. We're certainly in the last quarter of this consolidation. Either it will finish with another higher low meaning around $1,310 -$1,315 in the next couple of days or we will indeed get a final sell out down towards my initial target zone around $1,295 - $1,262. This "worst case scenario" of course would free the gold market from all the weak hands and give us an excellent chance to buy the dip.

But currently the situation is not clear yet. Personally I am indecisive as on the one hand I expect the $1,300 level to hold while on the other hand experience tells me that before the largest moves gold most often shakes out everybody. A move down towards $1,262 would certainly do exactly that. But in bull markets the pullbacks are usually shallow and the miners are already oversold. So my main expectation is calling for a very limited remaining downside here and that prices should hold above $1,300 before finally taking off towards $1,415 - $1,430 somewhere in October.

In the bigger picture my midterm price target remains $1,500 - $1,530 until spring 2017 from where I do expect a multi-month pullback back down to current levels...

4. Bitcoin - consolidating but still bullish

The consolidation since early august continues and Bitcoin is experiencing a rather quiet period. This is positive especially after the drama in August. I think the market is building a base here for the next leg up. Only a move below the rising green trend-line around $545 would indicate that something is wrong with the bull thesis.

As long as Bitcoin is holding above its 50MA ($592) and especially above its 200EMA ($553) a rally towards the next resistance level around $635 should be just a question of time.

Let's keep the stop at $495 - pretty far away but this wide stop will help us to ride the trend instead of being shaken out during volatile short-term noise. Overall Bitcoin should test the recent high at $777 soon or later. Just continue to hold your bitcoins.

5. Midas Touch Consulting Portfolio & Watch list:

As recommended in my last report we were able to buy GDX and BRI below the defined limits. Besides that the portfolio is doing well and all positions are currently in green...

Endeavour Silver (EXK):Endeavour Silver is in a consolidation between $4 and $6. Overall its holding up pretty well and remains my top silver stock recommendation. Endeavour Silver is one of the highest leverage play on the silver price and has an excellent management. Just continue to hold and let your winnings run.