Introduction
Gold remains in a well-defined daily up-trend channel that began in late 2016. The upward trend is bullish until proven otherwise. Over the past month, however, gold and the SDPR Gold Trust (GLD) have been falling in a well-defined trend channel. On Friday, the U.S. jobs report showed that (in part due to hurricanes) the U.S. lost jobs for the first time in many years. Gold immediately sold off, before recovering to finish the week just below even. The recovery in prices began right after the 10 am EST London gold market “fix” (how about that?). Gold bulls are looking for a bottom. Have they found one yet?
Source: Coppertone
While there is evidence that a bottom is forming (especially in the silver price), I personally would like to see more confirmation before initiating a long swing trading position in gold. I do anticipate that we will see a bottom this week, whether it comes earlier in the week or later. However, I believe that gold bulls should prefer to see a support in GLD hold at $118 before resuming the uptrend.
I'm a long-term bull for gold and hold 5-10% of my investable assets in vaulted precious metals. Gold is money. However, it is currently traded as a paper derivative. I can’t (and won’t attempt to) predict the day when gold will be set free from its paper chains. Until then, I will occasionally hedge my physical stack by shorting gold and silver at apparent inflection points. Or, I add long exposure when my indicators and the trend turns upward. In my approach to swing trading, I keep an eye on five indicators, which are shown below.
Two of the indicators above are proprietary: the OPEX magnet calculations and the value indicators. These are updated on a daily basis for
