Thursday, 4 December 2014

Gold monthly thoughts

In the book, I write a lot about news sources, information and timing.

Nowhere has this been more important in the last few years, than in gold. People with no previous interest in metals suddenly became experts on price action and history. They sold a convincing story to many, who have since lost their shirt as gold fell from 1900 to 1200. 

Those who pushed gold at 1900 refuse to admit they were wrong and have since come up with every story in the book about how gold is manipulated etc. Yes, there's been proof of small scale price fixing, but it is simply impossible to hold down the price of an asset if the world wanted it. If the smart money were interested in gold, trillions could have been buying but they weren't. As central banks propped up markets with QE programs, gold became a non-performing asset as the search for yield crossed into stocks, bonds, property etc. You can come up with a million excuses, yet the simple fact is that the gold-promoters have been wrong for three years. 

Gold will have its day when the market loses faith in government and currency, but all commodities will rise in that scenario. Until that day, we will not see panic-buying so choose your levels wisely.

So let's now look at the technical picture. Gold has recently broken another uptrend line. This level is now important. If gold can rally into the triangle it will test the line again.

The test may be a simple 'retest' that often happens when a trendline is broken, which would then see further losses towards 1000/730.

If gold can hold through the trendline (more likely) then it will push to retest the resistance line at 1400. Only a break and hold above 1400 will signal that 1900 is in play.

Until then: beware false breakouts and volatility. But most importantly, follow the price action and not sales tactics. 


  1. Ya gold is going to go to zero, wait and get it for free than.

  2. I appreciate your chart work that you publish. My gut feel is that we are well beyond the logic and "scientific" chartist approach. "Paper" gold at 1000/730 and you won't find an ounce of physical to purchase.

  3. Thanks Robert. Yes, in terms of gold, I am really looking for confirmation because it will drag all PMs once it goes. I think the physical will disappear on the way up too, when the next crisis appears.