Loading ...July 6, 2020
Technical observations of
RossClark@ChartsAndMarkets.com @ChartsByRoss
Gold – Summary of Various Technical Studies
Trade what you know, not what you wish.
The trend in gold is undeniably up with the most recent support at $1760.
Gold typically bottoms before crude oil (March 19th versus April 20th). They rebound together, however for the next three months gold has difficulty breaking out beyond 1.6% above previous highs. Once it closes through that resistance (currently $1817 basis nearest futures) we can look forward to further upside action.
It is unusual for gold to breakout high during July, However, rallies in gold that start early and make new 52-week highs in July (seven times in forty years) top out around 34 trading days from the preceding low. The targeted window is July 16th to 28th with an optimum of the 24th.
The normal seasonal pattern is bullish from late in July through September
The 2.618% Fibonacci measurement out of the six-year base under $1370 measures to $1888. The larger pattern from the $1923 high to the $1045 low measures to $2466 and $3344.
While crude oil’s rally from the April low is impressive it remains near fifteen- year lows. The low cost of energy assists the profitability for gold mining stocks.
The low yield in Treasury and corporate bonds continues to provide an incentive for investors to look for alternative investments, such as bullion.
The outperformance of gold verses the broad equity markets began in October 2018 and appears to have room to run.