Spot Chart | Trader Dan's Market Views: Euro <b>Gold</b> Below <b>Chart</b> Support | News2Gold |
- Trader Dan's Market Views: Euro <b>Gold</b> Below <b>Chart</b> Support
- <b>Gold</b> Fields (GFI) Sees Hammer <b>Chart</b> Pattern: Time to Buy? - June <b>...</b>
- <b>Gold</b> Price Short-Term Bottom Coming Due :: The Market Oracle <b>...</b>
| Trader Dan's Market Views: Euro <b>Gold</b> Below <b>Chart</b> Support Posted: 03 Jun 2014 12:14 PM PDT Trading in gold has been relatively quiet in today's session ( boring would be a better word). I suspect traders on both sides do not want to get too aggressive before the outcome of the ECB meeting on Thursday is known and the monthly payrolls number is released this Friday. The thinking at this point among the majority is that the ECB is going to provide some sort of stimulus measure. Recent inflation readings in the Eurozone and especially in Germany indicate that the bank has room to make a move along this line. The biggest concern is the lack of lending by banks ( borrowing by others). That is the same issue that had been plaguing the US economy even after the first two rounds of QE came and went. The Fed opened up the liquidity spigots but the money never made it out of Wall Street and the equity markets into the hands of the consumer in a large way. That lack of circulation through the broader economy is the reason that the Velocity of Money fell and has continued to fall. One wonders if that ECB does unveil some sort of liquidity program whether or not that would produce the same outcome this time over in the broader Eurozone. It seems to me that the one thing that the ECB could do, which would find broad acceptance among most of the members - and certainly among business - would be to try to knock the Euro even lower. Keep in mind that when the Japanese government came under new management with the Abe administration, that it set about deliberately trying to weaken the Yen ( even though it denied so doing). Japan was trying to fight deflation but what they managed to do was to, in a sense, export some of that deflation to the Eurozone because the weakening Yen tended to push up the other majors at its expense. If the ECB starts trying to take the Euro lower, who gets to import the deflation impact from its currency strengthening? That is unclear. I guess we will all find out soon enough what the ECB is going to do this week. For the time being, I am keeping a close eye on the gold price in terms of Euros, or Eurogold. Here is its chart.  You can see, for the last two months ( April and May) whenever the gold price neared the 920 level, it bounced. Last week it fell through that level and has remained below it for the time being. It is still up for the year but its looks heavy. There is some uncertainty as to what gold might do if the ECB acts. One school of thought is that if they set out to deliberately drive down the value of the Euro, it would benefit the US Dollar and thus pressure the gold market. Another train of thought goes that, depending on whether they engage in their own version of QE, it would tend to shore up the gold price as traders who fear a debauchment of the Euro would buy gold as protection against that. I have to wonder whether or not the ECB would be any more successful than the US Federal Reserve however when it comes to producing inflation. Central Banks can lower interest rates until the cows come home but they cannot make consumers or even business for that matter, go out and borrow. To take on new debt, individuals have to feel comfortable enough or confident enough, that they can handle the additional debt load. The labor markets, I believe, have more sway over the inflation issue at this point in the game than any other area of economic interest. That is true whether it be in the Eurozone, here in the US or over in Japan. The key in my mind, at least as it regards gold, is whether these Central Banks efforts can seriously fan the flames of inflation or whether their policies are more or less acting to produce a type of standoff between inflationary forces that they want to set loose and the deflationary forces from large levels of debt and stagnant or moribund labor markets. Based on the price action in the bond markets, and especially the action of the TIPS spread, the market is looking ahead and seeing a period of slow but stable growth without any strong inflationary pressures. That is what we have had for the last couple of years in particular and why stocks have done so well and why gold has fared so poorly. Something would need to change on that front to alter the current sentiment. Interest rates have perked up a bit here in the US with the yield on the Ten Year back above the 2.5 level. It is currently sitting at 2.588, up from 2.438 last Tuesday. Here is a quick look at the broader commodity sector using the Goldman Sachs Commodity Index. It has fallen to the same level from which it bounced last month in May. It still is showing no signs of any upward acceleration however.  One of the reasons that this index is thus far refusing to break down is on account of the strength that continues in crude oil. Large hedge funds have huge long positions in that market and have refused to sell those down and that is keeping this market supported even in the face of some sizeable stocks in storage. As I have said before, crude is a mystery to me because I cannot fathom how much of this hedge fund buying is related to their wanting to own the stuff as an asset class into which they can diversify or how much is due to a general perception that the US economy is very slowly improving with a corresponding increase in demand. I watch both copper and crude very closely in this regard and their chart pattern over the last of week or so has been remarkably similar. both remain supported but have been unable to extend higher. That might change at any time but for now, neither are giving any clues as to what direction they expect the global/US economy to move in.  |
| <b>Gold</b> Fields (GFI) Sees Hammer <b>Chart</b> Pattern: Time to Buy? - June <b>...</b> Posted: 02 Jun 2014 06:37 AM PDT Gold Fields Limited (GFI - Snapshot Report) has been struggling lately, but the selling pressure may be coming to an end soon. That is because GFI recently saw a Hammer Chart Pattern which can signal that the stock is nearing a bottom. What is a Hammer Chart Pattern? A hammer chart pattern is a popular technical indicator that is used in candlestick charting. The hammer appears when a stock tumbles during the day, but then finds strength at some point in the session to close near or above its opening price. This forms a candlestick that resembles a hammer, and it can suggest that the market has found a low point in the stock, and that better days are ahead. Other Factors Plus, earnings estimates have been rising for this company, even despite the sluggish trading lately. In just the past 60 days alone 2 estimates have gone higher, compared to none lower, while the consensus estimate has also moved in the right direction. Estimates have actually risen so much that the stock now has a Zacks Rank #2 (Buy) suggesting this relatively unloved stock could be due for a breakout soon. This will be especially true if GFI stock can build momentum from here and find a way to continue higher of off this encouraging trading development. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> |
| <b>Gold</b> Price Short-Term Bottom Coming Due :: The Market Oracle <b>...</b> Posted: 02 Jun 2014 06:23 AM PDT
By: Jim_Curry
With the position of this larger 154-day wave, the current assumption is that any new rally should end up as a countertrend affair, and - once complete - should be followed by an eventual re-test or break below the December, 2013 bottom of 1181.30. Having said that, there are bullish indications for the very short-term, which is the main subject of this article. The next chart is more important to the near-term action. It shows the 34-day cycle, which is one of the more dominant of the short-term cycles in the Gold market:
Of immediate note is that the 34-day channel is also pointing south, and is closing in on the lower 154-day channel line. With that, we should be nearing at least a short-term bottom for the metal, with a sharp rally soon favored to materialize, though we can't rule out slightly lower numbers being seen first. Once this 34-day wave does bottom out, then the normal low-end expectation is for a rally back to the 34-day moving average or higher, with that key moving average currently at the 1293 figure (and declining). In addition to the 34-day cycle, there is also a less-dominant 10-day component, which is also due for an extended bottom anywhere in the current timeframe. This cycle is seen on the chart below:
With the above said and noted, we then have both the shorter-term 10 and 34-day waves at or into bottoming range, and with that the current assumption is that the next decent swing low on the daily chart will come from these two waves. In terms of price, any reversal back above the 1262.50 figure on Gold – if seen at any point in the coming days – would tend to confirm an upturn in the 10-day cycle, and likely that of the larger 34-day wave as well. Adding to the notes above, I pointed out in some of my recent market commentaries that taking out the 1289.00 figure on Gold favored a test of the 1277.00 number - and taking that figure out to the downside then confirmed the downward phase of the aforementioned 34-day cycle to be back in force. I like to take a detailed look at how each of the up and downward phases have played out in the past history of each of the cycles that I track, in order to get some idea of what to expect in the near-future. With that, taking out the 1277.00 figure favored a drop on down to the 1254 area or lower, simply due to a normal low-end statistical expectation with the 34-day wave. Going a bit further, the chart below is the most important chart that I track, which shows the daily cycle turning point forecast (in aqua), which is a combination of the dominant cycles on the daily chart of the price of gold. The larger weekly cycle forecast is overlaid (also in aqua), and is pointing lower - which is in line with the position of the larger 72 and 154-day waves. Take a look:
On the above chart, the most important periods are when both the daily and weekly forecast paths are moving in the same direction. With this, I have labeled with red/blue/green arrows the times that both the daily and the weekly forecasts line up together. The green arrows show when both forecasts are moving higher (i.e., a 'buy' signal with the model), and red arrows are when both models are forecasting lower prices (i.e., a 'sell' signal). A blue arrow is shown when the models are in disagreement (i.e., a 'neutral' signal). With the above said and noted, we can see that when both forecast paths are in alignment, that the market tends to move strongly in that direction. I should add that, when the daily and weekly forecasts disagree, that the market has more of a tendency to follow the shorter-term (daily) forecast path. With that, of particular note for the near-term is that the next daily forecast bottom is projected for the 6/2/14 date, which is Monday of this week and is plus or minus a day or so in either direction. Thus, the continued weakness seen into Friday looks to be in line with the next bottom for the daily forecast path – which, ideally, should also end up as the bottom for the aforementioned 10 and 34-day time cycles. Summing up the above, the short-term path favors a bottom fairly soon (i.e., 6/2/14, plus or minus) and at least a sharp bounce into what is looking to be June 11th, plus or minus, which is the next daily forecast peak. Until a lower level actually materializes, any reversal back above the 1262.50 figure going forward, if seen, would likely confirm that move up to be in progress, while remaining below the same allows for a continued break down to the 1230's first, only then to set up this bottom. Jim Curry Market Turns Advisory Email: jcurry@cycle-wave.com Jim Curry is the editor and publisher of Market Turns advisory, which specializes in using cyclical analysis to time the markets. To be added to our mailing list click HERE Copyright 2013, Jim Curry - Disclaimer - The financial markets are risky. Investing is risky. Past performance does not guarantee future performance. The foregoing has been prepared solely for informational purposes and is not a solicitation, or an offer to buy or sell any security. Opinions are based on historical research and data believed reliable, but there is no guarantee that future results will be profitable. The methods used to form opinions are highly probable and as you follow them for some time you can gain confidence in them. The market can and will do the unexpected, use the sell stops provided to assist in risk avoidance. Not responsible for errors or omissions. © 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication. |
In light of the recent developments in the Gold market, I wanted to post an article on the current cyclic configuration - and what we can expect in the very near future. Since my prior article back in December of last year, we have seen the expected larger countertrend rally with the combination of the 72 and 154-day cycles, which were able to take the metal up to a mid-March peak of 1392.80. The chart below shows the larger 154-day component, which is seen as heading lower into the month of August, which is plus or minus a month in either direction:
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1 Comment for "Spot Chart | Trader Dan's Market Views: Euro Gold Below Chart Support | News2Gold"
Asian physical demand for gold, which tends to provide a floor for the shiny metal during bearish times, has also been weak as per the information from Gold Trading Advisory Company.