{"id":114867,"date":"2017-10-16T13:39:42","date_gmt":"2017-10-16T17:39:42","guid":{"rendered":"http:\/\/countingpips.com\/?p=114867"},"modified":"2018-06-01T15:55:34","modified_gmt":"2018-06-01T15:55:34","slug":"gold-and-the-dollar-good-news-and-bad-news","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/10\/gold-and-the-dollar-good-news-and-bad-news\/","title":{"rendered":"Gold and the Dollar: Good News and Bad News"},"content":{"rendered":"
October 16, 2017<\/div>
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By The Gold Report<\/b><\/p>\n

Source: Clive Maund for Streetwise Reports<\/em> \u00a0\u00a010\/15\/2017<\/a><\/b><\/p>\n

Technical analyst Clive Maund discusses what he sees as a “swan-song rally.”<\/p>\n

We’ve all had people come up to us and say “Do you want the good news
\nfirst or the bad news?” I always opt for the bad news first, to get it
\nout of way and end on a lighter note. The bad news is that the dollar
\nlooks set to stage a significant “swan-song” rally in coming weeks, which
\nwill probably result in gold being beaten down again. The good news is
\nthat once that’s done its toast\u0097and that’s when the big gold and
\nsilver bull market that longer-term charts are calling for will really
\nget underway.<\/p>\n

The last update called for the dollar to drop down to mark out the Right
\nShoulder of a Head-and-Shoulders bottom pattern, and for gold to break
\nout of its rather steep intermediate downtrend and rally, and that is
\nexactly what has since happened. On its latest 8-month chart, we can
\nsee how the dollar has backed off to the vicinity of its flattened out
\n50-day moving average and the vicinity of the Left Shoulder low of the
\nbase pattern, in order to mark out the Right Shoulder low. Three bullish
\ndevelopments to be noted that result from the dollar rising out of the
\nHead of the pattern are the breakout from the downtrend, the break clear
\nabove the 50-day moving average, and the big improvement in momentum
\n(MACD), which is swinging positive. If our interpretation that this is a
\ngenuine Head-and-Shoulders bottom is proven valid, the pattern targets
\nthe 97 area in coming weeks, probably by early November. Needless to
\nsay, this will not be good news for gold and silver prices.<\/p>\n

<\/center>Our prediction made many weeks ago that the dollar would rally off the
\nlower boundary of its big bullhorn pattern shown on the 4-year chart
\nbelow to break out above its restraining Dome has proven to be correct,
\nand a projection has been drawn on this chart showing roughly what is
\nexpected to happen. As we saw above on the 8-month chart, the base
\npattern now approaching completion targets the 97 area approx. This is
\nthe “swan-song rally”\u0097the dollars last rally before it “hands in its
\ndinner pail,” and should present a wonderful last opportunity to
\naccumulate the better gold and silver stocks, before the dollar does an
\nabout face, and breaks down from the large Broadening Top pattern into a
\nsevere decline.<\/p>\n

<\/center>The Hedgers chart has been warning for weeks that the dollar will
\nreverse and rally, as has been pointed out repeatedly. The latest chart
\nshows the rally is still ahead of us\u0097which is congruent with the
\ndollar being at the Right Shoulder low of its Head-and-Shoulders bottom.<\/p>\n

<\/a><\/center>Click on chart to pop up a larger clearer version.<\/p>\n

Chart courtesy of www.sentimentrader.com<\/i><\/p>

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In light of the above it is logical to expect gold’s plucky little
\nbreakout from the steep downtrend channel shown on its 6-month chart
\nbelow to abort, and if the dollar advances towards the 97 area on the
\nindex, we would expect gold to react back, probably to the $1200\u0096$1215
\narea.<\/p>\n

<\/center>Such a reaction back by gold accords with its latest COT chart, which
\nstill looks more bearish than bullish, since gold’s COT structure
\nimproved but little on its recent downtrend. There is still a lot of
\nroom for improvement on this chart\u0097and that probably means lower gold
\nprices dead ahead. . .<\/p>\n

<\/a><\/center>Click on chart to popup a larger clearer version.<\/p>\n

On gold’s 8-year chart it continues to look like it is in the late
\nstages of a giant Head-and-Shoulders bottom pattern. The build up in
\nvolume over the past 20 months certainly looks positive, especially over
\nthe past several months, all the more so because it has driven volume
\nindicators higher, notably the Accum-Distrib line, which is not far off
\nmaking new highs\u0097exceeding its level at the 2011 peak. Once gold
\nbreaks above the resistance level approaching $1400 it will be on its
\nway, although it will then have to contend with another important band
\nof resistance in the $1510\u0096$1560 range. A near-term retreat by gold to
\nthe $1200\u0096$1215 area in the face of a dollar rally will not damage
\nthis long-term technical picture.<\/p>\n

<\/center>The Market Vectors Gold Miners, GDX, which functions as a gold stocks
\nindex, is marking out a giant Head-and-Shoulders bottom that roughly
\nparallels the one completing in gold itself. A near-term decline to $20\u0096$21 in GDX will be viewed as presenting another important buying
\nopportunity for the sector. The volume pattern during the build out of
\nthis base pattern is very bullish, with big volume on the rise out of
\nthe low (Head) of the pattern, tailing off steadily as the Right
\nShoulder has formed.<\/p>\n

<\/center>A mistake commonly made by gold and silver bugs, especially those close
\nto or involved in the mining industry is to become “wed” to the sector
\nto the exclusion of most everything else. This habit has ruined a good
\nmany investors in the Precious Metals sector in recent years. Investing
\nshould be regarded as an “opportunity cost game,” where you seek always
\nto maximize your returns within a given time frame consistent with an
\nacceptable level of risk. This is the philosophy on clivemaund.com, which
\nis why we made a detour into the marijuana sector last year ahead of
\nthe legalization votes, when it boomed, and why we have invested in a
\nvariety of different sectors and stocks this year, notably the Biotech
\nand Medical sector. There is no need to wait around on the Precious
\nMetals sector to start a major uptrend, when, apart from individual
\noutstanding opportunities in the sector than can occur at any time, it
\nis possible to go with whatever is performing in the here and now.<\/p>\n

We have had a number of outstanding successes in recent months and weeks
\nwhere we traded on the basis of some very clear and useful chart
\npatterns and signals, and a number of our stocks have produced some
\nclassic examples of chart patterns involving different types of
\ncandlesticks and price and volume patterns, often in combination, in the
\nrecent past. There is one in particular that I would like to draw your
\nattention to in CHART SCHOOL \u0096 Gravestone Doji and Parabolic Blowoff calls a top<\/a>,
\nwhere just on the one chart going back 4-months we see a dramatic
\nconfluence of different factors\u0097candlesticks, parabolic slingshot,
\nvarious oscillators and the volume pattern all calling a top RIGHT NOW
\nfor a particular stock, and this also provides examples of breakaway
\ngaps and a Flag. We sold this stock on Friday. To take a look at its
\nchart, all you have to do is click on the link above, and for a good
\nmeasure a couple of other interesting chart examples that we traded are
\nincluded in this article, which is intended to be educational.<\/p>\n

Hope you like what you see.<\/p>\n

Clive Maund<\/i><\/a> has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years’ experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.<\/p>\n

Want to read more Gold Report<\/i> articles like this? Sign up at www.streetwisereports.com\/get-news<\/a> for our free e-newsletter, and you’ll learn when new articles have been published. To see recent articles with industry analysts and commentators, visit our Streetwise Interviews<\/a> page.<\/p>\n

Disclosure:<\/b>
\n1) Clive Maund: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies referred to in this article: None. I determined which companies would be included in this article based on my research and understanding of the sector.
\n2) The following companies mentioned in this article are sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click here<\/a> for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
\n3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer<\/a>. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
\n5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and\/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this interview, officers and\/or employees of Streetwise Reports LLC (including members of their household) own securities of Reliq Health Technologies, Helius and Blue Moon Zinc, companies linked in this article.<\/p>\n

Charts provided by the author.<\/p>\n

\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

By The Gold Report Source: Clive Maund for Streetwise Reports \u00a0\u00a010\/15\/2017 Technical analyst Clive Maund discusses what he sees as a “swan-song rally.” We’ve all had people come up to us and say “Do you want the good news first or the bad news?” I always opt for the bad news first, to get it […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-114867","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/114867","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=114867"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/114867\/revisions"}],"predecessor-version":[{"id":114869,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/114867\/revisions\/114869"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=114867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=114867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=114867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}