Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench
Gold & Silver Prices in

Time for Katie to Bar the Door in Gold?

IMG Auteur
 
 
Published : February 22nd, 2013
458 words - Reading time : 1 - 1 minutes
( 1 vote, 1/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Market Analysis

Is it Katie-bar-the-door-time in gold? We seriously doubt it, although we wouldn’t blame bulls for feeling despondent after yesterday’s sharp decline, the second in a week. The April Comex contract plummeted to an intraday low of 1558 before reflexive buying provided a so-far modest bounce in after-hours trading. The good news is that the low was pretty close to a trendline that just about every gold trader on earth must have been watching. With such a devoted following, it’s hardly surprising that this technical support was breached marginally, presumably to put the fear of the lord in wanton speculators.

But there are some troubling facts as well. For one, considering how many bulls probably got stopped out when the trendline was penetrated, the futures should have shown more pluck on the rebound. This is just simple physics, since, once gold’s fair-weather friends and perhaps more than a few true believers had been shaken loose, profit-taking on the subsequent rally should have been greatly reduced, lightening the ascent. Oh well. Perhaps spirited bargain-hunting will commence on Thursday, driving gold back above $1600 and out of the danger zone.

Reason for Caution

Even if that were to occur, however, there would still be reason for caution. That’s because at $1558 the futures were trading $12 beneath a Hidden Pivot correction target we disseminated to subscribers a while back. It kept us on the right side of the trend, even when gold feinted higher on Tuesday to 1619. We called that rally “gratuitous” in an intraday update, and so it was. But the relapse to below the 1569.90 target we’d drum-rolled is problematical, since these proprietary supports tend to work very precisely. The fact that this one did not work doesn’t mean we miscalculated or that Hidden Pivots are valueless, however; rather, it suggests that the selling was strong enough to muscle past the support and that it is not yet spent. The picture would turn still uglier with the creation of a bearish “impulse leg” on the long-term charts. That would happen if the lows labeled #1 and #2 are exceeded in the days ahead.

We won’t presume to know the future, since that can only distract from keeping an open mind. For what it’s worth, though, our proprietary forecast for certain mining stocks suggests the bloodbath is not yet over. Specifically, we still have an outstanding target at 13.15 for GDXJ, the Junior Gold Miner ETF. That would represent a 16% drop from yesterday’s fearful low and, probably, corresponding weakness in gold itself. Click here for a free trial subscription to Rick’s Picks, You’ll also gain access to a 24/7 chat room that draws veteran traders from around the world, and to all of our current forecasts and archives.


<< Previous article
Rate : Average note :1 (1 vote)
>> Next article
Rick Ackerman is the editor of Rick’s Picks, a daily trading newsletter and intraday advisory packed with detailed strategies, fresh ideas and plain old horse sense.
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Debate Over Electric Trucks: Let’s Get It On
25 AprJerry82
Thanks Mish, this was a very insightful and thought provoking piece. I've often heard concerns about the weight of these new electric trucks and th...
No, The Junior Mining Stocks Are Not About To Implode - Dave Kranzler
25 AprJerry821
Thank you Dave for this excellent article. I agree with your well thought out critiques that point to junior miners being just fine. Relying on tha...
Gold Bullion Erases $10 Bounce Despite French Election, N.Korea Ris...
25 AprJerry82
I don't know how much I'd trust the listed GLD holdings. I always found GLD's structure to be a bit strange. They so famously claim that they are 1...
The Story of Gold Money, Past, Present and Future, by Edwin Walter ...
18 AprJerry82
Thank you for this very thought provoking piece Nathan. I have not read any literature from Edwin Walter Kemmerer before but I am inclined to pick ...
Gold Prices Slip $10 After Breaking Downtrend as UK's May Seeks Bre...
18 AprSam Maher3
"That left the GLD gold ETF needing a 2017 high of 849 tonnes in bullion backing." I frequently see you make these claims on GLD's holding...
Bombs Away!
17 Aprprljr-1
James tribe owns trump.
Krunch Time for Korean Krackpot Despot, Kim Jong-Un: Missile Crisis...
17 Aprprljr1
Unfortunately the world is not run by Christians, well except for the useful idiot ones.
Krunch Time for Korean Krackpot Despot, Kim Jong-Un: Missile Crisis...
15 Aprkevthorne1
I read from this that it is the USA that is 'a threat to the entire world'. How many times have we heard this - 'country X is a threat to the w...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS