From the Trading Desk
Plunging commodity prices and the euro backing off from recent highs have weighed on gold so far this week. A Bloomberg index of 22 weighted commodities has fallen to its lowest level in over 16 years. Following last week’s OPEC meeting which effectively decided to keep output high for the consortium and highlighted discord between Iran and Saudi Arabia, crude oil has fallen 15%. It is currently at seven year lows and, as the biggest commodity market by far, has led the broader complex lower.
Gold made a nice short covering rally at the end of last week but it has been unable to distance itself from the overall commodity rout over the last few days. Rallies approaching the $1,080 level will likely be sold into while support is coming in at $1,050, an area that more or less held on four separate trading days recently. Silver’s tenor above $14.50 was short lived and it is gravitating back towards major support at $14.
Definitely a consolidating day for gold (down a couple dollars but still above $1,050 resistance), even with a slightly weaker dollar. Silver down all day but still above $14 resistance.
It’s time to update my 8 indicators that help me to predict the gold market. So far they are doing a darn good job of helping me stay the course of lower prices. Yes, we get bounces along the way, but look at the data for yourself and you’ll see what I see.
Gold was $1,283 when I wrote this article Aug 3, 2014 and first shared with the public what I see. Dollar was 82 and I predicted it to go higher. It hit 100. Yen was 102.72 (and I called in 2012 when it was in 70’s to weaken). It is at 123. 10 year treasury was yielding 2.55. Today 2.22. CRB Index lower today than then. Velocity of money still pushing on a string. Europe still fighting deflation. VIX 24.83 today VIX 15.84 showing no fear.
8 Indicators That Tell Us Where Gold Might Go Next
I will more than likely do an article on this soon.
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.
All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.