Monday, August 04, 2008

What's Going On With Gold?

I've been bullish on gold since June which is when I bought GLD. I was pleased to see how nicely gold rallied from late June going into mid July but things have certainly changed since then.

I had a very nice open profit in gold but did not see the down move that was coming. As a result I have given back all of my open profits and am now out of the gold market. The inverted head and shoulders bottom produced a rally but failed to reach its upside price objective. Oh well, that's trading!

I still think the trend is up based on the price swings. If you look at the basic swings you'll see that GLD is still making higher highs and higher lows but I think I'll wait for some upward momentum to come back into this market before I look to get long again. I'm on the sidelines for now.


Gary said...

Gold typically has a 4 wave pattern. We just saw the A wave up. This wave rarely makes new highs. We are now in the process of putting in the B wave down. Unfortunately oil is dragging down all the commodities. It might not hurt to wait for a COT bullish signal before buying gold again.

I also think the commodity complex is trying to tell us that the world is entering a serious global recession.

Nathan said...

Gday Kev.
Love your blog mate.
Gold on daily chart is oversold on Williams indicator and has created a bullish divergence.
Also hovering around 200 MA which has over time been an approximate low.
In light of popular theory that the US market's bear run has more to run, I reckon Gold is a chance of returning to mid 900s.

Adam said...


How often do you make blog entries? Is it on a random basis or on set days of the week? I like reading your blog as it provides valuable reading. Hence this question.

Kevin said...

I update my blog when I have some free time available or when I see something significant happen in the market. Thanks for reading.

Kevin said...

Hi Nathan,

Not sure what to do with gold at the moment that is why I have no position but I'm not giving up on looking for an entry to get long.

Kevin said...

Hi Gary,

Good call in oil. I agree with you about waiting for COT to give a buy signal before entering this market again. August usually kicks off a seasonal rally in gold so I am still looking to buy this market at some point.

Gary said...

It wouldn't hurt to see Bernanke do something stupid again like cutting rates even more or really jacking up the TOMO or TAF auctions. I'm pretty certain he will continue cutting rates. He has to save the financial sector.

He needs oil to come down first before he goes back down that road again though.

A little patience in the precious metals sector is probably a good thing here. Then when we get the first hint of more cuts back up the truck on gold.

Anonymous said...

Sorry about being ignorant here Kevin et al, but what is "COT" and how will I know a buy signal when I see it.

Great blog and thanks for sharing your trading insights.


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