xauusd forecast

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Gold and Silver Trading Tips Report

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Gold-and-Silver

Arguments for lower prices:

  • 3rd attempt (within 11 months) to take out heavy resistance around US$1,790.00-1,800.00 failed and Gold clearly broke down from bearish wedge in October
  • COT Data again pretty bearish for gold and silver
  • Mining Stocks crashed down through support and 200-MA
  • US-Dollar in short term uptrend since mid of september, so far no clear trend reversal
  • Recession in Europe, slower demand from China and India

Arguments for higher prices:

  • Gold & Silver bounced impulsively from oversold levels. This price action has a very bullish character.
  • Gold clearly above 200-MA (US$1,665.66)
  • Reversal at Fibonacci retracement, this confirms “correction” within uptrend
  • Gold/Silver ratio heading lower again, creates MACD buy signal for precious metals
  • Longer term Gold in similar correction pattern like 2008/2009. Breakout to US$2,000.00 expected to happen in summer 2013
  • New uptrend in precious metals since august 2012 that should carry gold up to US$1,850.00 and 1,900.00 until spring 2013.
  • US-Dollar Death Cross (long-term 200-MA broke above its short-term 50-MA in mid of october). This signals dollar weakness!
  • November very bullish seasonals. Seasonality until spring very promising.
  • Never fight the FED. Unlimited QE -> money printing all over the world will push asset prices in all sectors higher…
  • Throughout history, periods of massive money creation have always been inflationary and this time should be no different.
  • Santa Claus/Year End Rally has probably started yesterday
  • massive tension and escalation in middle east (Israel & Gaza, maybe Egypt and other states to get involved ?)

Conclusion:

  • After the initial impulsive bounce from oversold levels Gold has been consolidating between US$1,740.00 and US$1,705.00 in a bullish fashion. Now Gold looks ready to break out above US$1,740.00 very soon. This breakout will start a heavy wave of buying/short covering and should bring gold very fast to next resistance at US$1,790.00 / US$1,800.00. Here another setback must be expected. Overall I continue to believe that Gold will move up to US$1,850.00 and around 1,900.00US$ until spring 2013.
  • Any break below US$1,705.00 and especially US$1,696.00 would be very bearish but is not expected.

Long term:

  • Nothing has changed
  • Precious Metals bull market continues and is moving step by step closer to the final parabolic phase (could start in 2013 & last for 2-3 years or maybe later)
  • Price target DowJones/Gold Ratio ca. 1:1
  • Price target Gold/Silver Ratio ca. 10:1
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Indian Gold Demand Picks Up

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Indian Gold Demand Picks Up

The love for gold has been reignited in India, according to the World Gold Council (WGC) in its Gold Demand Trends for the third quarter of 2012. India regained its title as the strongest performing market, overtaking the greater China area, as the country experienced a bounce-back in demand due to improved sentiment during the festival season.

Compared to the third quarter of last year, Indian gold jewelry demand grew by 7 percent while gold bar and coin demand rose 12 percent. Total consumer demand was 223 tons, compared to 205 tons this time last year. The second largest market was Greater China, which consumed 185 tons in the third quarter of 2012. This was less than the 201 tons consumed in the third quarter of last year.

Together these markets in the east made up 55 percent of the world’s jewelry and investment demand, according to the WGC. indian-gold

Although India experienced a setback earlier this year when gold shops boycotted a proposed tax on the yellow metal, imports recovered by July “as inventory levels were bolstered (aided by a well-timed dip in the local price) and the market adjusted to the customs duty,” says the WGC.

The third quarter has historically been a strong seasonal time for the Love Trade to come alive in the east. Monsoon rains and the festival season in the fall are generally associated with the buying and giving of gold. Still, for the year, don’t expect the Love Trade in India to be as strong as it was in 2011, as gold demand remains subdued with the ongoing weakness of the rupee.

Read More…

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ETF (GOLD & US Dollar)

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On its way down from 168, GLD broke its first support level and came to rest on the second (200-DMA) from which it had a bounce. Last week, I suggested that it might find some resistance on the small horizontal red trend line, which it has, and which caused it to pull back three points. It’s difficult to see how it could have much more of a decline right away if the market is going to have a mid-correction rally, so we can probably expect the near-term trend to turn up again, perhaps reaching the top channel line (blue) before rolling over again.

Gold Etf

If GLD does not have much of a rally from here – especially if the market does rally – it will be an indication that some decent weakness can be expected into the cycle low. In any case, subsequent action should form a P&F pattern which will help us determine the extent of the decline into the 25-wk cycle low.

UUP (dollar ETF)

UUP normally goes against equities and gold. The index appears to be extended short-term and eady to pull-back. This can be seen in the indicators, one of which is very overbought and the other beginning to show some negative divergence. If a short-term top is forming, this should help the market to find a short-term low.

US Dollar ETC

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Why It’s Time to Sell Gold

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After touching a new 2012 high following comments from Federal Reserve chairman, Ben Bernanke on Monday, Toby Connor of Gold Scents details why it might be time to book some profits in gold and mining stocks.

It’s been a great run over the last two months but it may be time to tighten stops on mining stocks. You can see in the chart below that at least during this stage of the new C-wave gold is still inversely tethered to the dollar index, as are miners.

Dollar Gold HUI Chart

dollar fall

During the period from September 2011 to July 2012, the dollar was moving generally higher out of its three-year cycle low and that forced a 10-month correction in the precious metals sector. It’s been my opinion that the three-year cycle in the dollar topped at that point, and should drift generally lower until the next three-year cycle low sometime in mid-2014 (with occasional counter trend rallies from time to time).

I’ve been expecting one more leg down in the dollar to test the February intermediate low before the first counter trend rally.

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GBPUSD & XAUUSD Trading Alerts

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