Memorial Archives

Gold Sector Chart Update
posted Nov 12, 2005 at 02:56PM

Bullion Daily

Note: The red circle around the daily MACD should be blue, not red.

Gap up over the 50 dma, along with momentum indicators turning up give the charts a bullish tone. However in the same way that 450 was a more "strategic" support metric, I believe breaking 470 is necessary to show that bullion is striving for new highs.

Gold Dollar Ratio

A compellingly bullish chart and one you don't see too often!

The Fly in the Ointment

Gold COT Data

As we can see there is a lot bullish price action going on in what, for gold, should be a very difficult environment. One of my continuing reasons for caution is the COT data structure. Here the percentage of open interest held by the commercial net short position is still at levels associated with IT tops in the bullion price.

HUI Daily

Move over the 50 dma and short-term resistance line is bullish. On a "big-picture" point of view it still takes a close over the 250 level to signify a true break-out of gold equities.

HUI Gold Ratio

Back into bullish territory

US Dollar Daily

US Dollar Weekly

Overall bullish structure remains intact but is nosing into overbought territory.

Same thing here.

Trading thoughts. There is no basic change to my thoughts of last week. Gold was due for an up week, but I am not convinced that something "big" is happening. The COT structure is bearish and bullion does have trend-line resistance at 470 to contend with.

Until the HUI closes above 250 or the dollar closes below 90, I myself, will have nothing "adamant" to say.

Buying the bounce off the HUI support trend-line is a very viable tactic for those who have done so. As long as trend-line support holds then everything is OK. I think you do want to try to move a stop to break-even as quickly as you can.

Right now I am cautious about putting any new cash into any market. To my relief there is still quite a number of gold stocks which look to be putting in bottoming patterns, or are plain oversold. So if this morphs into a major breakout, there are still some quality "laggards" to jump into in a timely fashion.

Good trading


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