FOREXYARD: Forex News Blog | |
- Commodities Appear Poised for Upward Correction
- 2011 Gold Forecast – Benefits and Risks
- Black Friday May Add Strength to Gold Over Weekend
- Gold’s Cyclical Downturn Could Reach $1280
- Gold and Silver Expecting Cyclical Retracement?
- Is the Price of Gold Heading for $2,300 an Ounce?
- Gold Hits High Mark then Bounces Off Trend’s Upper Border
- Analyzing Gold’s Latest Price Movements
- Gold’s Price Surge, Has it Peaked?
- Prediction: Gold Will Fall to $1,080 an Ounce before the End of the First Quarter
| Commodities Appear Poised for Upward Correction Posted: 24 Jan 2011 07:00 AM PST
It appears the decline in US dollar values has not yet been priced into commodities and we may be expecting a major correction in physical asset prices this week as a result. So far the EUR/USD has climbed over 0.9% on the day, but Gold, Silver, and Crude Oil prices are still falling. Either the market is pulling out of commodities in tandem with the US dollar as part of a portfolio diversification in equity markets, or the USD’s plummet has not yet been priced in. Either way, commodities should climb in the days ahead. Here’s why: Gold and Silver are both approaching significant support barriers. Gold’s 3-month psychological support level at $1,335 an ounce is near at hand and we are already beginning to see Gold quiver and shake as it reaches that price, hinting at its upcoming bounce. Silver’s month-and-a-half support line at $27.00 an ounce is literally mimicking Gold’s price behavior. Both should see an upward retracement of around 3-5% in the forthcoming two weeks of trading as a result of these technical indications. Crude Oil likewise appears to be approaching a relevant price barrier near $87.50 a barrel. However, we don’t see the same quakes on oil prices as we do in precious metals, suggesting a fundamental valuation is in play on Crude Oil. In short, if any of the commodities are to break through their immediate support levels, it looks like Crude Oil has the best chance. On the other hand, the heavy downward movement of the USD today suggests that all commodities should experience a corrective upturn this week. Look for the swing and capture the bullish movement as it heads your way! |
| 2011 Gold Forecast – Benefits and Risks Posted: 21 Dec 2010 02:00 AM PST
The dominant story regarding Gold is the bullish run we’ve experienced since the financial crisis of 2007-2008. More recent news shows a continuation of this trend, but how do we interpret the widening fluctuations in price over the past two months? Starting July 28th the price of Gold began a sharp bull run that saw little to no retracement. On October 15th the price came down sharply, marking the first retracement since late-July, moving from $1385.15 to $1315.30 over a 7-day period. Ever since, we’ve seen the price of Gold move within a broadening range, but still bullish. Three explanations have been circulating. The first argues that the approach of the holiday season brings wider price swings as currency values get boosted by increased retail sales and heightened travel among consumers. These price swings begin to compete with the rising price of Gold, creating broader movements. The second takes the same approach, but downplays the holiday aspect. As winter months approach in the Northern Hemisphere, a natural increase in commodity prices (particularly Crude Oil and Natural Gas) occurs, which affects US dollar values, which in turn affects Gold. These first two explanations mirror each other rather well and there doesn’t seem to be any indication that they both can’t be right. The third explanation has to do with end-of-year profit-taking and forecasting. The close of any calendar year brings forth article after article forecasting what will be in the new year, economically speaking. These forecasts bring with them portfolio adjustments by most traders, hedge funds, and investment firms which leads to the closure of existing positions, increased spending from year-end holiday bonuses, and a shift in exposure. As a result, we see wider fluctuations among prices as traders anticipate the unchanging yet so-called “forecast to change” market. But what’s changed? Gold prices are still moving up and forecasters are expecting them to continue unabated in 2011. Some estimates put the price near $1800 an ounce by this time next year. Without taking a stance as to the validity of these positions, one is reminded of the same attitude towards the housing market pre-2007. Are we seeing the formation of a Gold Bubble? No doubt long-term Gold traders made lucrative profits over the last two years. Such confidence building stability makes me suspect that their confidence in Gold won’t likely waver in the months ahead. But wasn’t that one of the many causes of our current economic situation: blind confidence in an asset which proves profitable time and time again? After all is said and done, Gold still looks to continue rising in 2011. Traders may expect some downward retracements at the starting months of 2011 from a post-holiday/post-winter cooldown in spending combined with an eventual warming temperature. But overall, the adage “the trend is your friend” seems to apply. |
| Black Friday May Add Strength to Gold Over Weekend Posted: 26 Nov 2010 06:24 AM PST
Gold prices appear to be ending the week with little change since Monday. While the precious metal climbed over $30 in value by mid-week, the price had tumbled back to $1353 an ounce as of this afternoon. The trend for Gold appears to remain bullish despite this recent corrective movement. However, we should also note that the retracement experienced since Wednesday could be part of a larger cyclical downturn with take-profit targets at $1340, $1310, and $1280. If holiday shopping picks up over the weekend from Black Friday in the United States, then there is the possibility of a quick rebound in precious metals at the start of next week. If retail sales enter their holiday upswing, we could see demand for jewelry-linked commodities (Gold, Silver, and Platinum) experience a bullish spike as well. The retracement period on Gold appears to be shrinking, which means the target of $1310 may be the lowest Gold reaches before extending its bullish trend further. Traders may want to keep an eye on retail sales and consumer spending figures emerging from the US during the post-Thanksgiving/pre-Christmas shopping period. We can see on the chart below that Gold may be entering the final phase of a head-and-shoulders candlestick pattern, with a target around $1310, and perhaps even as low as $1280. Gold – Daily Chart |
| Gold’s Cyclical Downturn Could Reach $1280 Posted: 23 Nov 2010 02:43 AM PST
As I mentioned in an article yesterday, the price of Gold has been operating in long-term cycles of advance-and-retreat for the past year-and-a-half. While the overall trend is bullish for precious metals (Gold, Silver, and Platinum), there are periods of downturn in each. Looking at our chart below, it seems as if evidence is mounting for just such a movement. Expecting a bearish correction is different than claiming a trend reversal. I am in no way disagreeing with other analysts whose claims place precious metals within a bullish channel. To the contrary, I agree with such claims, but would like to recognize the opportunities for short-term profits within the cyclical fluctuations of these instruments. As we can see in the chart below, Gold has been moving with a rather distinctive pattern. Marked with a red line on the chart below, we can see the general direction of the overall trend of Gold. But notice that the price deviates away from this trend with sharper upturns. It's as if the market is slamming its foot on the gas pedal and then hitting the brakes, over and over. I call this the "teenage drag-racer" formation. But it goes beyond chart formations. We have a descending RSI, moments away from exiting the over-bought region. We also have a recent bearish cross on the Stochastic. Both indicators suggest bearishness. Also, if we follow our "teenage drag-racer" pattern, we can pick a great entry/exit point for traders. Those going short on Gold may want to place their Limits near $1280. Those waiting for an entry point for another Buy position on the general uptrend should likewise aim for $1280 an ounce. If the bullish channel persists through the winter season, as it should, targets upward of $1500 an ounce may not be far off following this retracement. |
| Gold and Silver Expecting Cyclical Retracement? Posted: 22 Nov 2010 11:27 AM PST
We've been watching the price of precious metals soar over the past several months and many analysts will tell you to expect a continuation of this trend. We must not forget that global economies are still suffering financial concerns and that normalcy remains elusive to the current state of the world economy. In such an environment, safe haven investments – like Gold and Silver – tend to rise. But to short-term, intraday traders there is yet another side to this story. While it is true that Gold and Silver are on the rise, and will likely remain so for some time, it is also true that every trading instrument moves in cyclical patterns. Gold and Silver each possess a number of technical indicators which point to a buildup of bearish pressure. This is clearest on the Gold weekly chart (see below). A pattern has emerged on the price of Gold which is worth exploring in greater detail. Stay tuned this week for a deeper look into the cyclical pattern of Gold which has developed over the past year-and-a-half, as well as its implications for other precious metals, such as Silver. Gold – Weekly Chart |
| Is the Price of Gold Heading for $2,300 an Ounce? Posted: 11 Nov 2010 06:35 AM PST
Debate over the Fed's recent QE2 maneuver has been generating some interesting volatility on commodity prices, particularly Gold. We've seen the US dollar gaining strength as investors anticipate the possibility of renewed inflationary growth in the US, but occasionally there is similar counter-pressure from investors working to price in the devaluation which must naturally accompany a money-printing policy such as QE2. Commodity prices appear to be rising despite a strengthening USD, but there have been a few minor blips in downward movement amid growing concerns as to the effect of QE2. Moreover, the sudden weakness of the EUR in recent days, due to debt concerns in Europe's periphery, has also added to these fluctuations in both the USD and commodity prices. Previous articles have harped on the notion of a rising price of Gold, and nothing really seems to be able to change that analysis. We've seen Gold reach a nominal record high of $1,420 an ounce, even though its true record, after adjusting for inflation, was reached about 30 years ago. What is interesting in this observation is the price reached at that time, in today's dollars. When Gold took off in the 1980s, its value in today's dollars was around $2,300 an ounce. If today's price of Gold is heading in a similar direction, then right now may be the best time imaginable to open a Gold Trading Account and start making profits. What are you waiting for? |
| Gold Hits High Mark then Bounces Off Trend’s Upper Border Posted: 10 Nov 2010 01:36 AM PST
Gold prices have been on a rollercoaster ride these past few trading days. Following the announcement by the US Federal Reserve of a new round of quantitative easing, now known as QE2, the price of gold immediately climbed to a recent high of $1,424.10 an ounce. However, the subsequent profit-taking action across the market at the start of this week has driven the US dollar much higher while simultaneously pulling commodity prices downward. These price swings in gold's price have caused a stir among market participants, many of whom have profited greatly by capturing these movements with their new Gold Trading Accounts, now available at ForexYard. As we can see in the chart below, there are two bullish trend lines interacting with one another, creating a distinct bullish channel. As the price climbed towards the upper border of this channel we have witnessed a strong technical reaction resulting in a massive sell-off. Additionally, technical indicators on the RSI and Stochastic (slow) show a build-up of sell pressure on Gold. The first support level to be tested during this correction is near the $1,382 price mark, while the second, stronger support level rests near last week's psychological barrier of $1,340 an ounce, with a potential pause occurring near $1,360. Traders operating with our new Gold Trading Account may wish to take this opportunity to go short on Gold until it reaches a safe turning point, likely to occur somewhere between $1,360 and $1,340. Afterwards, this precious metal will likely continue its bullish streak. Gold – Daily Chart |
| Analyzing Gold’s Latest Price Movements Posted: 03 Nov 2010 05:06 AM PDT
ForexYard will be publishing a number of informative articles on the subject of gold trading for the next few weeks as part of a campaign to promote our newest feature: ForexYard's Gold Trading Account! Take a look at the chart below and see for yourself what has been happening lately with the price of Gold. We've been experiencing a secular bull market for the last few years with this precious metal, and this technical analysis will demonstrate why it's likely to continue in the near-term. As you can see, the price of Gold has been rising sharply since July, but took an even steeper path beginning in late September. You can see in the Stochastic (slow) indicator at the bottom that the price was being over-bought throughout that steeper rise, resulting in a breach of that sharper uptrend. Now what we are seeing is known as a "consolidation triangle." The previous trend was broken, but the price remains within a larger uptrend, and is even consolidating towards a decision point in the trend. Following this analysis puts the price of Gold most likely at a rate of $1,340 an ounce sometime in the next few trading days. Upon reaching that price level, we should see Gold receiving a modest level of support, and then a continuing of its previous long-term uptrend. Gold – Daily Chart By opening a Gold Trading Account with ForexYard, you can take advantage of this impending price movement. With the high value of trading Gold, you can make significant profits by joining these trend fluctuations. So don't miss out on this once-in-a-lifetime opportunity! |
| Gold’s Price Surge, Has it Peaked? Posted: 03 May 2010 01:17 AM PDT
Typical of a sustained movement, similar to what Gold prices have been experiencing, there eventually arrives a decision point. Concerning the price of Gold, that point may have arrived. We’ve seen gold prices climbing steadily these past few weeks as concerns over the Euro-Zone’s sovereign debt crisis and potential Greek default have pushed many investors out of currency safe-havens and into commodities such as Gold. What we see now in the charts is Gold prices hitting a potential breaking point. The $1,181 price level appears to represent a strong resistance line for Gold prices. It is only natural then that our technical indicators, displayed below, are showing an impending downward correction. But is the price of Gold really ready to halt its upward mobility? - The chart below is the Gold daily chart by ForexYard. - The indicators used are the Williams Percent Range, Stochastic (slow), and the Fibonacci Retracement lines were also drawn. - Point 1: Here we see that the price has reached a significant resistance point, represented by the 76.4% Fibonacci Retracement line. - Point 2: Our Williams Percent Range shows the price highly over-bought and beginning to turn downward. - Point 3: There are multiple bearish crosses on the Stochastic (slow) which highlight an impending downward correction. - Taken together, all of this information leads us to suspect that Gold prices should react in the near future to technical pressures and correct downward. But fundamental analysis tells a different story. For more on the fundamental side of the equation, read Peter Robinson’s analysis on Gold and the European markets here. Gold – Daily Chart |
| Prediction: Gold Will Fall to $1,080 an Ounce before the End of the First Quarter Posted: 03 Feb 2010 12:46 PM PST
For a long time now, one of the most tradable financial instruments in the market is spot gold. Gold was one of the biggest “winners” of the recent recession, and traders who put their faith in gold saw incredible profits. While most of the world was obsessed with the falling stocks, the intelligent traders have entered the “Gold-Rush” journey and they haven’t looked back since. In the interest of making things a bit clearer, here is a graphic demonstration that shows the value of gold since 09/14/2008:
The reason I chose this date (09/15/08), is merely because it was the day on which “Lehman Brothers” filed for chapter 11 bankruptcy protections. While many analysts claim that the crisis began in 2007, all will agree that the main panic, which led to the market turmoil, was initiated on this day. On 09/15/08 gold was trading for $875 an ounce, and as you can see within 14 months, gold has reached an all-time record of $1,224 an ounce. There is a vociferous debate regarding the reasons for this phenomenon. Some say that it is a basic instinct of people to look for the more tangible investments. Others say that it is good sense to put your money on precious metals in time of crisis, as they have proven to retain value for centuries. However, according to experts’ analysis made over the last month, this crisis is “over the hill”. The U.S. unemployment rate has peaked at 10.0%, and for the first time in 2 years is expected to fall. Inflation is beginning to slowly rise, and fears of deflation have diminished. As a result, it seems quite logical that the psychological affect that turned people to keep their money on gold will fade away, and more sophisticated financial instruments will offer higher yields – at the end of this process, gold will probably drop below $1,000 an ounce, maybe even to $900. Unfortunately, this might take a little while; however in the meantime here is the 4-hour chart, let’s see what we can learn from it:
Here are some conclusions that could be made from this chart: • A bearish cross of the Slow Stochastic has ended the recent bullish trend. |
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