Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

October Pegged as Cyclical Low for Gold

By

Technicals suggest the bull cycle itself won't end until 2013 or 2014.

PrintPRINT
Gold has been busy consolidating in what I believe will be a 13 Fibonacci month Primary wave 4 correction. The gold bull market I've been following since 2001 is a likely 13-year bull cycle that will end in 2013 or 2014 depending on how you count. This current correction pattern is working off a 34 Fibonacci month rally that took gold from 681 to 1923 at its ultimate highs. Last fall I warned about the parabolic run likely ending in the 1908 ranges and for investors to position themselves accordingly.

Today we have gold trading around 1600 and my firm's recent forecast in May was for a rally into mid-June topping around 1620-1650 ranges in US dollars. The intermediate forecast still calls for a possible drop to 1445-1455 ranges this summer, the same figures I gave out last September for a Primary wave 4 low.

Only a close and a strong move over 1650 will eliminate the downside risk in my opinion.

Below we can see a weekly chart showing the 34-week moving average line as well as the obvious downtrend line. The 34-week moving average line acted as support during the Primary wave 3 rally from 681-1923. It now is acting as a resistance ceiling to break through, and I don't think we will until this fall.

The likely cyclical lows for this gold correction will be in the October window and investors should make sure they are positioned long by that time.



Twitter: @activetrading

Editor's Note: David Banister is the chief investment strategist and co-founder of ActiveTradingPartners.com, a small-cap portfolio and market advisory service.

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
< Previous
  • 1
Next >
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

PrintPRINT

Busy? Subscribe to our free newsletter!

Submit
 

WHAT'S POPULAR IN THE VILLE