Maund On Gold
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On gold’s shorter-term 8-month chart we can see that it is showing signs of having hit bottom. If Russia now invades eastern Ukraine, which is a significant risk through to the end of this coming week, then it is almost certain that gold will take off strongly higher from here. If not and it instead decides to destabilize eastern Ukraine further without going for an all-out invasion, gold technically looks set to go up from here anyway, perhaps for other reasons like a falling dollar. There were 2 days last week when it threatened to break down below an important support level, but bounced back on strong volume to close well off the day’s lows. We can also see a “coiling” pattern in the Descending Triangle that has formed over the past few weeks, which implies that, contrary to what usually happens with Descending Triangles, the price is going to break out to the upside, and soon.
The long-term chart for gold still looks hopeful. On its 15-year chart we can see that it still looks like it is basing above its long-term uptrend line. However if this uptrend line fails, and the nearby important support at the lows of last June and December is breached, then gold is likely to drop back to the strong support in the $1000 area. Tactically the right way to handle this is to stay long, if long, and perhaps buy here, and either get out on stop if $1180 fails or hedge accordingly, as $1180 marks the lower boundary of the support at the intraday lows of last June.
Courtesy of http://www.clivemaund.com
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Clive P. Maund’s interest in markets started when, as an aimless youth searching for direction in his mid-20’s, he inherited some money. Unfortunately it was not enough to live a utopian lifestyle as a playboy or retire very young. Therefore on the advice of his brother, he bought a load of British Petroleum stock, which promptly went up 20% in the space of a few weeks. Clive sold them at the top…which really fired his imagination. The prospect of being able to buy securities and sell them later at a higher price, and make money for doing little or no work was most attractive – and so the quest began, especially as he had been further stoked up by watching from the sidelines with a mixture of fascination and envy as fortunes were made in the roaring gold and silver bull market of the late 70’s.
Clive furthered his education in Technical Analysis or charting by ordering various good books from the US and by applying what he learned at work on an everyday basis. He also obtained the UK Society of Technical Analysts’ Diploma.
The years following 2005 saw the boom phase of the Gold and Silver bull market, until they peaked in late 2011. While there is ongoing debate about whether that was the final high, it is not believed to be because of the continuing global debasement of fiat currency. The bear market since 2011 is viewed as being very similar to the 2-year reaction in the mid-70’s, which was preceded by a powerful advance and was followed by a gigantic parabolic price ramp. Moreover, Precious Metals should come back into their own when the various asset bubbles elsewhere burst, which looks set to happen anytime soon.
Visit Clive at his website: CliveMaund.com
