Gold: The Bells Are Ringing Again

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 |  Includes: GDX, GGN, GLD, SLV
by: Peter Degraaf

On Wednesday gold and silver selling exhausted at $640.00 and $12.00. Then, on Thursday morning, a number of bells rang, to tell us that it was now 'safe to get back in the water.'

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Gold Index Chart

This is the daily gold chart. The circles draw our attention to the fact that the last two dips in the price of gold were not confirmed by the three supporting indicators. This is bullish. The red and green dashed lines indicate that the overall uptrend channel was never really violated.

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GDX chart

This chart features the GDX electronic gold unit. The upside reversal (green arrow) that ended trading on Wednesday is bullish, coming as it did right near the 8-month old support zone. All three of the supporting indicators (blue dashed lines), also remained positive during the past month.

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XAU vs EOD Index Chart

This chart features the index that compares the XAU mining index to the gold price. Generally speaking, when this index is rising, it is a bullish signal for gold and gold stocks. The index has been in ‘uptrend’ since March. Wednesday’s ‘outside reversal’ (green arrow), is another bullish sign, and another ‘bell being rung’! The three supporting indicators are positive.

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Gold v Oil

This is a long-term chart that compares gold to oil. The 19 year mid-point is that 15 barrels of oil pays for one ounce of gold. Today it only takes 9.35 barrels. GOLD IS A BARGAIN COMPARED TO OIL! (And the trend is up!)

Summary:

  • Gold bells are ringing again. It's time to cover shorts, and go long.
  • Silver is suffering from ‘chart damage’ that occurred on Wednesday, but silver will be pulled along by strength in gold.
  • Oil is supported by the massing of sea power in the Persian Gulf (there are currently three carrier forces, with a fourth on the way).