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Will June Be A Major Low For Gold?

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Viking Analytics


  • Time cycles and the timing of fed increases point to a low in the June time frame.
  • We have seen sell-offs into these time cycle lows.
  • The $1,305 price range and 200-day moving averages will be important for bulls to hold in the weeks ahead.

In February, I published a Seeking Alpha article that suggested gold would establish a major low in the May-June time frame. This still looks like a distinct possibility, based upon time cycle analysis and the timing of Federal Reserve interest rate hikes. In this article, I we look at a few charts to find some clues on where gold might be headed.

Time and Fed Cycles

The chart below shows a simple time cycle analysis (the blue half-sine waves). An intersection of a roughly 2- and 3-month time cycle has coincided with a bottom or rally in gold prices. The time cycle intersection is highlighted by the shaded blue vertical box.

Interestingly, four of the five past time cycle rallies have coincided with the Federal Reserve raising interest rates by 0.25%. This is highlighted by the dashed vertical lines. It is possible that this dynamic is a "sell the rumor, buy the news" event. The Fed is indeed expected to raise rates by 0.25% at its June meeting the 12th and 13th.

Source: Viking Analytics

We can see that the last three time cycle rallies were preceded by a sell-off of gold below the 200-day and 400-day moving averages (roughly the 50-week and 100-week moving averages). If the sell-off occurs again, then gold might be an excellent buy in the $1,260-$1,280 range.

If we compare the price action in the summer of 2016 with early 2018, we might see similarities prior to the October 2016 sell-off. The $1,305 price range has been important support and resistance, and gold bulls will want gold to hold here above the 200 day MA.

Volume Profile

The volume profile for the past year in gold shows a point of control near $1,280. Not only is the current 200 day MA an important technical level, but if gold

Commodity Conquest

In my Commodity Conquest service, I write a daily report on the OPEX Price magnets for many key commodities, including natural gas, crude oil, gold and agriculture. I also do in-depth coverage of many commodity firms.

My verifiable trading record from on all completed trades through early May has included a win rate of over 65% with an average return of 2.9% and an average holding period of 11.8 days.

This article was written by

Viking Analytics profile picture
Systematic and quantitative analysis.Rob McBride has 15+ years of experience in the systematic investment space and is a former Managing Director at a $14 Billion hedge fund. Rob has deep experience with market data, software and model building in financial markets. Erik Lytikainen has 25+ years of experience as an entrepreneur, business developer and financial analyst. He founded Viking Analytics in 2015 after selling a commodity production & trading company he co-founded in 2006.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am always long precious metals in one form or another.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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