News, analysis and commentary for gold traders and investors

"Be Right - Sit Tight"

Jesse Livermore
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Gold Market Wire

News, analysis and commentary for gold traders and investors

Gold Market Update

Gold Approaches 100-Day Moving Average

July 21, 2021 - (Gold Market Wire) - For some time now Gold has taken the limelight from Silver, and the exemplary part of that has been its ability to hang on to the $1800 level. That is now coming under threat, Moreover, the 100-day Moving Average is just below that level, and is another marker off substance. For Gold to stabilize, it will have to fend off both of these challenges.

...trend line and 100-day m.a.

So, the showdown looms. Gold is dancing on the line, so to speaking our zoom in shows just how precise the move has been.

...touch down - on the nose.

Right now, the ever strengthening US Dollar is providing headwind, but truly that is not the fulcrum it was last week and the week before. It is now the rather skittish behavior that the market produces every time it looks like equities are about to fall out of bed. If that happens, everyone knows what to expect - namely, the deluge from which all assets will be flushed and the charge into cash will commence. We have already witnessed the first 'dress rehearsal' for this. As already noted - heading into the August-September-October period, i.e. - the "crash quarter", with its ample historical precedents, only heightens the nervousness.

Our intraday movement in Silver has gotten us out of the position, in totem, with the trading position and the core position from April being closed. The core position saved our bacon this time, as the trading position was underwater from above $26.00. Yet again, the vicissitudes of trading can, a times, be mitigated, by an investment stance that is taken at what appear to be market extremes. We are certainly happy that this was one of the times, and that our Silver position was divided into two small pieces, which lessened the pain.

What next? Breathing room on the sidelines, for sure. The failure in the metals to make headway and the strength of the US Dollar - a position we have had for some time (vs. Euro and Sterling) and have no intention of unwinding, have combined with the general uneasiness about equities, and a lousy seasonal posture to take Gold and Silver lower. We are unimpressed with performance of both, regardless of what the cheerleaders keep coming up with. We are starting to entertain the idea that the US Dollar will power along nicely, keeping Gold (and Silver) down, and then the metals will make a miraculous turn-around, moon-shot higher, and that will see the end of this 20+ year bull market. That could be next month, or in four years time. We have no idea when... although everyone professes to know... and they have been wrong. Bit, we take heart. The US Dollar has been on a great run, and eventually the metals will overshoot to the downside and we will add to core and trading positions yet again. Right now, if anything, the market looks bearish. There is a lot of work to be done to work off that sentiment, and we will start by looking for the 100-day moving average in Gold to be cleared - after which we will re-assess. Right now its all in the US Dollar, and while we know that the Dollar and Gold can and have moved higher together, and likely will in the future, the other forces arrayed against the metals are simply to much to over-come in the short term... and we are flat and out of the market, save for some very old core positions that go back over a decade.

We will continue to assess the market here on a regular basis, but it could be several weeks before any new positions get established.

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