Gold has made some exciting moves recently, but what can we expect in the future? In today’s video, I point out five reasons that I do not expect gold to make a new high just yet.
If the current cycle persists, there will be some interesting trades to be had in this market and a possible new high before summer.
The video is free to watch and there are no registration requirements. I hope you enjoy this gold update and make a comment on the blog about how you feel about this video and this market.
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub
(Thank-you Tom,)
It was clear to me that the response "missed the mark". I was wondering whether anyone else versed in the Gold market noticed.
Nevertheless, I respect what MarketClub is trying to do from a technical perspective. As well, I resepect the courage in posting their opinion, backed up with some rational, in a public forum.
At this time, however, I remain unconvinced w.r.t the track record for Gold performance when weighed against other more straightforward tools used for technical and fundamental analysis. That is to say, I still remain open to be convinced.
Interesting analysis on gold. But doesn't it look more like simple 5 Wave move? I read somewhere about relationship between gold and dollar. And it suggest there is major trend change of Gold after about a month or two after dollar peaks.
Cash for gold commercial on Superbowl Ad, and now stores popping up around town suggest there could be some bubble. In addition, Euroland debt problems could further strengthen the dollar.
Just my opinion.
I liked your analysis on the cycles of the gold market, but there is another side of me that likes to explore other reasons why a commodity like gold would go up or down during an unprecedented time as this. I have learned recently that the US has over 2 trillion dollars of short term debt plus around 1.5 trillion dollars we will need to borrow (or roll over) from others to pay the bills this year (deficit). Is this time different from earlier times during the analyzed periods that would possibly cause the cycle to change significantly? Hmmm.. Just the other day after Obama met with the Dalai Lama, China expressed their dissatisfaction and promised that there would be significant consequences for the recent percived hostile actions by the US for this action that they have deemed antagonistic. After all, we also just sold Taiwan some 6 billion dollars in weapons as well. China has also begun to try to protect their investment and have stated that they expect the US to make good on their obligations. China has invested so much here. Anyway, I think that the pot may just boil soon with respect to what I have stated above. Also, other regular participants that buy our treasuries are having a hard time with their own debt and economies that may prevent countries, like Japan, from buying our treasuries thereby possibly driving up interest rates considerably or possiblt failing to sell the treasuries need for us to service our debt. Moody's has stated recently that the US may be in danger of losing its AAA rating Hmmmm...What about the desterate back door monetization of our debt??!!?? Could things be coming to a head here? Does it look like Obama is an intelligent leader? Do the progressives (Soros and tream) have a plan to overwhelm our system so they can create a new one under the guise of a national emergency? There have been many steps taken in this country to prepare for such an event. To me, it looks like the people who pull Obama's strings have someone who will absolutely use their radical backround to go through with their ultimate plans. Have they been grooming Obama for years to pull this off? We will see soon what happens, but in this situation, I feel that although the cycle just may continue as Adam suggested, I would not put money on it. I think the odds are greater for all currencies to drop and for gold to rise fater this time than usual as Europe's problems mount with more to follow!
Those are my two bits.
Good luck to everyone.
Mark
This version is gramatically superior..sorry for the typos..
Adam,
The manipulation of the gold market that Andriyko was referring to above is not the result of Jim Sinclair or GATA. You are obviously confused by the question and have no clue of the work that Sinclair has been doing to provide financial security from a world of fiat currency intrinsically worth nothing and backed by nothing. The question about gold price manipulation was valid. Some of the largest banking institutions in the world have some of the biggest net short positions in the gold (and silver) markets. This is a fact. Not to mention the presidents "working group on financials". Haven't you ever heard of these things? Maybe you should master all angles of a subject before giving advice to myriads of readers through a self indulgent but naive article
Tom,
Thank you for your feedback.
I've heard all these statements before and none of them are new to me. I did not say that Mr. Sinclair was doing a good job or a bad job. I did not say that but thanks our major shorts in the market. To the best of my knowledge of banking traders to not get this kind of information out to anyone. Any suggestions on their position it's pure speculation at this point.
My job is to point out observations that I see in the gold market and other markets. You can disagree with me and what I fined and that's okay, that's what makes a market.
I'm not sure if you watched my video but I think it's very valid and the cycles we discussed have been consistent. We will see how my scenario plays out in the next year or so.
Every success,
Adam
I think that you are right as long as the FED's Policy stays at today's levels, what you are indirectly implying is that the FED will not rise rates till well into 2011. If so then we will surely see Gold at 1300...1400 USD or more and it will surely match your time frame, but the FED will surely trump your chart a bit sooner. All the best.
Adam,
Thanks for your always interesting videos and comments. They are very useful and the reason why I am now a member.
This latest one on gold got me puzzled and after watching it numerous time, I believe you may be wrong this time.
What if the Dec high and the Feb low are not a high and a low in your long term cycle analysis?
In my view they are only a short term variation of the long term cycle which started in July 09 and will take gold to its future high of $1300-1500.
But who am I to challenge one of my gurus!!!
Take care and all the best, Claude
Claude,
Thank you for your feedback.
It remains to be seen if the December high in gold and the February low are not a high and low in my long-term cyclic analysis.
Let's see how things play out and watch the market closely for clues. At the present time our trade triangle technology is long gold.
All the best,
Adam
What about gold stocks themselves. I'm a newbie at this and have all gold stocks at this time.
Thanks for any input
Craig,
Thank you for your feedback.
For the most part gold stocks will track the price of gold. However there could be times when acquisitions or mergers come into play that will affect the price of that stock independent of the price of gold.
I would say this, if you are monitoring the price of gold you should have a pretty good handle on what should happen to your gold stocks.
I hope this addresses your questions.
All the best,
Adam
Me,
We do not carry the two symbols you mention.
Sorry about that.
Adam
Hi Adam
Apologies for not being more specific earlier on. I am referring to XAG/EUR (Silver/Euro) and XAU/EUR (Gold/Euro). Thanks
David,
Thank you for your feedback.
It is dangerous to assume anything in the market place. What I was demonstrating and pointing out with my latest video on gold was the strong presence of some important cycles that seem to be repeating themselves.
I believe the gold will remain locked in a trading range until breaking into new all-time highs in the April/May period of 2011. We look for gold to peak in late 2011.
All the best,
Adam
HI Adam,
What range are you using for gold over the next 3, 6 and 12 months?
We have seen what could be a range which started around 1045 and now has moved to 1125.
The reason for my question is a move to the 1200 area, would support a very wide range. No doubt I agree with the volatility of the markets for the time being. However, it does appear some break from the $ is occuring, and gold may be taking its own course.
Your thoughts are always appreciated.
B/R
Dennis
Dennis,
Thank you for your feedback.
I think gold could be in a wide trading range but I believe that if the cycles are correct then it would be sometime before the 1225 level is taken out. I would refer you to my video for those time frames.
Right now our trade triangles are long gold and we want to follow those triangles as they have proven to be pretty accurate in this past.
All the best,
Adam
It would be helpful to have you list the assumptions guiding the projections made in the video. It appears that you are assuming a major cycle move now, instead of a brief pull back from 1200. Also, the rapid deterioration in currencies may alter the cycle periods. What other assumptions are you making?
Chris, the IMF has a history of making these announcments at peculiar times and contrary to sound trading strategy. What real trader would announce the closure of a big position before executing it? They failed to hold gold under 1100 (assuming that was their intent) and the 191 tonnes will be easily absorbed by the market. China dumped 35 billion in US bonds in December and could take the whole lot in one move. 191.3 tonnes can be purchased for 7.4 billion at 1100 per ounce.
I appreciate your view, it does seem as if the IMF would like to "talk" the price of gold down by announcing such a sale and that does seem counterproductive from a trading perspective.
Guess the best advice is to watch the charts and see where the price action takes us.
The IMF has announced that it will be selling 191.3 metric tons of gold on the open market rather than to central banks so this will no doubt prevent any major increases in the short to medium term. Market manipulation anyone?
Doug,
Thank you for your very positive feedback.
Every success with your trading account.
All the best,
Adam
Your observances really interest me. It's been almost 2 years now, since I decided to try investing/trading, and I've been with you for that long. I've used your website to check-out ticker symbols, your alerts, and trading videos. I've decided long ago, you're one guy I will depend on. My trading account was approved yesterday. Doug.
I have been following your Videos and Blogs. I find them very interesting and your technical tools interest me. Certainly, you are a successful trader and wish to share your knowledge. In that light, please do not interpret my questions as holding any malicious or impolite intent.
Given that you have posted this technical analysis, what makes you convinced that it will continue?
Further, why do you believe that the current overall wave higher is over and we have now entered a trading range? I was convinced you were expecting a move to the $1350 area based on the last energy field (inverted H&S)?
Why do you feel your technical tools apply to the Gold market when there appears good evidence that it is manipulated (ref. Jim Sinclair, GATA and others)?
Thank-you
Andriyko,
Thank you for your feedback and positive comments.
To answer your first question about the gold cycles they may or may not continue only time will tell. However the pattern seems very strong and we were looking for a cyclic high to occur in gold last December. We thought it would be occur later in the month but that cycle came in early. It also satisfied our $1,200 to $1,300 target zone.
The markets overall are much bigger than Jim Sinclair or other traders who might affect price action for one day.
I hope this addresses and answers your questions.
All the best,
Adam
I thought Gold gave a long signal today based on Trade triangle on spot gold. Monthly up, Daily up and today when it crossed above 1125, that was weekly up. Please explain.
Gajendra,
Thank you for your feedback.
Gold did indeed flash a buy signal on the weekly trade triangles on Wednesday.
The purpose of the cyclic video on gold was to show you what I believe to be the bigger picture on this market. The cycles have been very successful in gold.
Our trade triangles represent one viewpoint. Our cyclic work represents a different viewpoint that many readers find interesting.
All the best,
Adam
I've been long XAG/EUR and XAU/EUR for about 3 months now and was wondering why it isn't possible to see these crosses on Market club. They are actively traded crosses and I think in present day environment pose some opportunities. Thanks for all your work. Very informative.
Chris,
Please share the full names of these crosses when you have time.
Thanks,
Adam
What happens with problems of the Greece, Spain and other countries which have financial problems, if this explodes I am sure your chart will paint a difirent picture.
Then my apologies. I only notice the seemingly frequent changes in the gold related trades. Sorry.
Charles,
No worries.
All the best,
Adam
Charles,
Thank you for your feedback.
I'm not sure if you understood this video Charles. The purpose of the video was to show a very strong cycle in the gold market and how it has persisted for several years. I expect gold will make new highs sometime along the line based on this cyclic analysis.
In the meantime if the cycles persist we may be stuck in a broad trading range that could continue on until April/May of next year. That does not rule out trading opportunities in the short-term.
All the best
Adam
Adam:
You are a classical flip flopper and top caller who will keep your followers out of the definitive move. You should pay attention to the relative strength against the dollar and the new all-time high against the euro. On a positive note you should note be lonely since your trade is a common one now. But not a good sign if you are a contrarian. Let's see how many days it will take before you are advocating a long trade in gold while conventiently forgetting today's stance.
Harold,
Thank you for your feedback.
We are showing a daily chart and we are counting The time element in the months.
All the best,
Adam
Adam: your chart is weeks not months.
Richard,
Thank you for your feedback.
It is very possible that these two markets can work independent of each other. In the gold video, I indicate that gold potentially could move higher next year based on cyclic analysis. It remains to be seen if this scenario will play out.
In regards to the Dow, the major trend for the Dow continues to be positive. We have been waiting for a monthly red trade triangle to indicate a short position. As of this date that has not occurred.
I hope this answers your question.
All the best,
Adam
Adam,
How does this analysis regarding gold square up against the video, 'Is it Deja Vu for the Dow'?
If the Dow drops to the extent referenced in the video, won't that cause a flight to safety to Gold, pushing Gold to new highs?
Richard
A flight to safety would be to the dollar and that would bring gold down together with the Dow
Interesting theory the only thing I see wrong with it ,is that who says the last top is actually the top? You have 24 months then 22 months between tops, but the last top may not be the top, Gold could rally make a new high in the next month and then that would be the top.
Forward thinking like this and predicting the market I believe is a dangerous game and can result in missed opportunity. Now the market could start to rally tomorrow and traders will hold off because of comments like this and miss out on a huge run? If they were to run?
The charts is telling me that it is now in a sidways trend as soon as they tell me different I am on the trade.
I am not waiting for 20 months! This could be just a higher high in a bull trend it all comes down to the Euro. Gold has held against a strong US dollar which has only strengthened due to the Euro, if The Euro now starts seeing covering of the shorts (due to being so shorted who is left to sell)and strengthens the US dollar will start to weeken and gold by default (along with other commodities will rally)will explode.
I find it better to not predict but react to what the market tells me, and that can change overnight.
Stephen,
Bingo.
Regardless of how we look at the market, price action trumps everything else. That is the whole concept behind our trade triangle technology.
Thanks for your feedback.
Adam