Gold Surprise?

Posted on by The INO.com Team

The move down in gold yesterday surprised many traders and flashed an exit signal based on MarketClub's daily "Trade Triangle" technology. As we have mentioned before, we felt that gold was in a broad trading range and were not optimistic that it would shoot higher.

The action yesterday confirms that we have more of a two-way market. I expect we'll see further selling on any rallies from this level.

In today's video, I share with you some thoughts I have on gold based on one important element: how gold energy fields propel this market.

Two videos to watch before today's video:

Five Reasons Why Gold Will Not Make A New High This Time.
First published February 17, 2010

Energy Fields in Gold (New Video)
First published June 29, 2009

As always our videos are free to watch and there are no registration requirements. I would really like to hear back from you with regards to your thoughts on this video.

Your comments are welcome on our blog.

All the best,

Adam Hewison
President, INO.com
Co-creator, MarketClub

17 thoughts on “Gold Surprise?”

  1. iam,

    Thanks.

    The bearish head and shoulders pattern you refer to is not as tight as I would like it to be.

    I appreciate your insights.

    Adam

  2. Hi Adam another very nice and appreciated video.
    If possible could you explain to me why no one mentions the obvious bearish head and shoulders pattern in the six months gold chart, which would take spot prices to around $950.Maybe I am missing something that cancels the pattern ?

    Thanking you in advance
    iam

  3. Hi Adam,

    Thanks for the analysis. I am an old fart, but still learning everything I can. I traded Gold via GLD and made money on the run up. I got out at 1100 or so. Now that GLD has option I will go with Calls later. The market is not ready yet, as you pointed out.

    I went with Silver for now. It is volatile enough to make some money if watched closely enough. Again, far out in the money calls are an interesting way to invest. If the settles were faster, they would make good day trades. the liquidity seams to be there too. I am thinking about selling the daily highs, which have been predictable, and buying the lows, before close. I have 300 contracts that I am going to do this with, 100 contracts at a time, over 3 accounts. Schwab commissions are low enough to make this possible.

    Synthetic day option trading. Heh. The daily swings are in the thousands, and the commissions are ~$60 or so. That could cover the settle time out.

    Have a look at Silver for us Adam, Your advice is appreciated.

  5. Ditto to what Bruce said...Replacement of gold through mine production is at 1% of annual production. In other words, even if we want to we cannot "print" more gold like we can money.

    Alternatively, stimulus spending by world governments exceeds 8% of cash in circulation. Paper money will eventually hit a wall and there will be a flood to gold/precious metals.

    Gold usually trades sideways (trading range, as Adam says) for an extended period after fast run-up, so be prepared to buy on the major dip that wil probably come just before it takes off again. See charts of late 1970s into 1980s for comparison when gold and silver hit their previous all-time highs --- which were actually their all-time highs if you adjust for inflation (Gold hit $2000+ in today's dollars).

    Cheers

    1. DG.

      Thank you for your feedback.

      I totally agree with what you're saying. I think we will remain in a sideways mode in gold for some time before we see the evidence of inflation and a rush back into a hard assets like gold.

      All the best,
      Adam

  6. Words of advice,

    Don't bet against GOLD, I am making money playing my futures market and if I lose I take delivery. Gold is not only a commodity, it is also a currency play it as it is as a commodity and a currency. My prediction for this year is $1400+
    Good luck to everyone!

    Bruce

  7. Adam,

    Many thanks for you video. Very interesting analysis.

    I incorporate FIB as part of my trading strategy. Looking at the monthly Gold chart it appears as though Gold completed a butterfly, starting March 2008 and completing with the highs in December 2009.

    Would love to hear your thoughts on this observation.

    Kind regards,

    Mark

    1. Ivan,

      Thank you for your feedback.

      I am not sure what you mean by butterfly but I think we are going to remain any trading range for some time to come.

      All the best,
      Adam

  9. Adam,

    Thanks for sharing your savvy and views.
    a. Where can the volume of the Gold ETF (GLD) be viewed ?
    b. Is this a factor in your trading decisions ?

    Kind regards,
    Yoav

    1. Yoav,

      Thank you for your feedback.

      "Below chart studies" shows you the volume in the MarketClub app. Volume is not a component in our decision making process.

      All the best.

      Adam

  10. Hi Adam,
    fyi, normally I get an email when a new blog is posted,
    but I didn't get notified about the two gold blogs.
    Thanks

  11. Thank you Adam

    Do you have an opinion on the value of holding gold in terms of euros, rather than dollars?

Comments are closed.