Price Of Gold Exclusive Update

October 5, 2019

Our proprietary cycle indicator is down.

To public readers of our updates, our cycle indicator is one of the most effective timing tool for traders and investors. It is not perfect, because periodically the market can be more volatile and can result in short term whipsaws. But overall, the cycle indicator provides us with a clear direction how we should be speculating.

Investors

During a major buy signal, investors can accumulate positions by cost averaging at cycle bottoms, ideally when prices are at or near the daily 200ema.

During a major sell signal, investors should be hedged or in cash.

Traders

Simply cost average in at cycle bottoms when prices are at or near the daily 200ema; and cost average out at cycle tops when prices are above the daily 50ema.

Gold sector is on major buy signal.

GLD is on short-term sell signal.

GDX is on short-term sell signal.

XGD.to is on short-term sell signal.

GDXJ is on short-term sell signal.

Analysis

Speculation has peaked and will take weeks to unwind.

Short-term volatility can be very sharp, stay focused on the big picture.

Stay focused on the long-term.

USD/Gold

The inverse relationship between the dollar and gold has ceased since June this year, as both have been rallying together. However, USD made a higher high this week while gold made a lower high, thus resulting in a divergence. As we have been observing over the years, divergences in the markets often suggest and lead to a reversal.

  • If the dollar breaks trendline support, chances are good that the consolidation in gold will be over and a new leg up will begin.
  • If the dollar continues to rally, gold may breakdown to a full correction which will take weeks if not months to complete, and at a much lower price level.
  • Technical analysis favors the first scenario while COT data favors the second scenario.

Summary

Long-term – on major buy signal.

Short-term – on sell signals.

Gold sector cycle is down, a multi week consolidation/correction is in progress.

We have taken partial profits and are holding a core position for the long term.

Disclosure

We do not offer predictions or forecasts for the markets. What you see here is our simple trading model which provides us the signals and set ups to be either long, short, or in cash at any given time. Entry points and stops are provided in real time to subscribers, therefore, this update may not reflect our current positions in the markets. Trade at your own discretion.

We also provide coverage to the major indexes and oil sector.

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Jack Chan is the editor of simply profits at www.simplyprofits.org, established in 2006. Chan bought his first mining stock, Hoko Exploration, in 1979, and has been active in the markets for the past 37 years. Technical analysis has helped him filter out the noise and focus on the when, and leave the why to the fundamental analysts. His proprietary trading models have enabled him to identify the NASDAQ top in 2000, the new gold bull market in 2001, the stock market top in 2007, and the US dollar bottom in 2011.

The California Gold Rush began on January 24, 1848 when gold was found by James W. Marshall at Sutter's Mill in Coloma.

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