April 23rd, 2014
Published Daily

Has Gold Bottomed?

by Rick Ackerman on June 28, 2013 12:01 am GMT · 36 comments

[Since Wednesday night, when the commentary below first appeared, gold has broken down yet again, having traded as low as 1179 in after-hours action Thursday night.  The fact that a major 'Hidden Pivot' support at 1219.20 held for only a day is quite bearish going forward. Meanwhile, judging from the e-mail I received and comments posted in the forum, just about every person on earth has been expecting Comex August Gold to fall to at least 1150 for months, if not longer. If you haven't weighed in already, we invite you to post your own target in the forum, since someone is bound to be right. Earliest postmark with the correct call wins a trip to Six Flags Over Newark. RA]

Gold has plummeted anew, diving $54 to a low that missed a bear market target of ours by less than $2 on Wednesday. The intraday bottom at 1221.00 fell 1.80 shy of a 1219.20 target for the August Comex contract that had been disseminated to subscribers when the futures were trading $200 higher. So now what?  Because the target was an important one, a “Hidden Pivot” support that had been ten weeks in coming, we should expect a substantial bounce, even if it doesn’t last for long.  By substantial, we mean $100 or more over a period of perhaps 5-7 days.  However, the more feeble the bounce, the more bearish the implications for the intermediate-term.  To be more specific, if the futures were to take out the 1219.20 support within the next day or two, or exceed it after having bounced no higher than $20-$30, that would be a very bearish sign going forward.

So far, the rebound has amounted to $23, most of it achieved in after-hours trading. This is a modest showing, to be sure, although hardly reason for despair.  The good news is that it would take just a $10.20 thrust above the so-far recovery high at 1244.10 to turn the intraday charts robustly bullish. Specifically, a print exceeding the 1254.30 peak labeled in the chart above would create a bullish “impulse leg” on the hourly chart, raising the odds that any subsequent selloff would be a correction rather than a resumption of the bear market in bullion begun nearly two years ago. Of crucial importance, however, is that the rally from here be uncorrected on the 60-minute chart once it is above the 1247.90 peak. To put it another way, once they’ve gotten past 1247.90, buyers must not pause for breath until they’ve exceeded 1254.30 by at least a single tick (i.e., 10 cents).  Were that to occur, it would be the most encouraging sign we’ve seen in Gold in many months. Bulls should keep their fingers crossed as Thursday’s action unfolds.  Click here to sample Rick’s Picks free for a week.

Take the Hidden Pivot course at your leisure, in recorded one-hour segments. The real-time Wednesday Tutorial sessions, the HP Tutorial video library and a confirmed seat at the next live Hidden Pivot webinar on May 21-22, 2014 come as part of the package.



{ 36 comments }

Andrew Gutterman June 27, 2013 at 4:48 pm

On the NYMEX chart at

http://quotes.ino.com/charting/?s=NYMEX_GC.Q13.E

it looks more like a consolidation of the previous decline, setting up for another leg down, perhaps to my $1150 target?

Especially since the dollar is taking off on another rapid rise.

Andy

KevinR June 27, 2013 at 6:24 pm

Maybe all the way down to $1000

Hueofman June 28, 2013 at 8:36 am

The knife is falling, $1004 spot gold before August 7th 2013.

gary leibowitz June 27, 2013 at 5:15 pm

Rick, great call. It did hit and bound off your target. I will let the short term action going forward telegraph the trend.

Andrew Gutterman June 27, 2013 at 7:23 pm

So much for that! Kitco has it dropping quite fast out of my consolidation. $1150 or lower, here we come!

Andy

Terri Dactyl June 27, 2013 at 9:34 pm

I’d say gold is headed for $850-$900, the 1980 high. There is zero support whatsoever, and if gold can’t rally on any type of “positive” news, i.e. some likelihood of continued QE, then that tells me that it has much much further to go on the downside. Whether it’s the Fed & investment banks pounded this thing to no end, or longterm investors dumping it as fast as they can, it doesn’t matter. The trend is your friend, and on all time frames, from daily to monthly, the trend is unequivocally down.

Andrew Gutterman June 27, 2013 at 9:56 pm

My reading of the tea leaves says that $1150 is the minimum target. Nothing says it cannot go a lot lower. And since it took 18 months to build a top it is wise to assume it will take some fair amount of time to build a bottom, assuming some external event does not drive the price up. Like the Israelis nuking Iran.

Andy

gary leibowitz June 28, 2013 at 5:24 am

Yup, the bounce was small. We are nearing a bottom in my estimate and Rick’s assumption on a rebound of hundreds of points seems logical. If 1150 is hit there can be a 300 points move higher without violating the bear trend. I might very well try playing that bounce. As for equities, even with my bullish bias, I see a move lower before the consolidation phase ends. My target is 1508 to 1558 range.

Jill June 28, 2013 at 11:15 pm

Gary, to be clear, you expect tha market to move back down to at least 1558 and possibly to as low as 1508? Is that what you are saying here?

crusty June 28, 2013 at 4:33 am

looking to take on the jersey shore and 6 flaggs, I’m claiming the low today 6/27/13 …. at 1179.40 … basis GCQ13

crusty June 28, 2013 at 4:37 am

however i must ask, what / when will establish the winning criteria?

Rick Ackerman June 28, 2013 at 4:56 pm

Criteria? We’re going to make up the rules as we go along, Crusty. The ‘competition’ was intended as a joke.

Still waiting to hear from Jim Sinclair, by the way.

db June 28, 2013 at 4:40 am

Oops – just posted the following in the trading room, think it should have been in here: my bet says we saw the low in the last 15 minutes @ 1180 in spot GC
. Thanks!

Cam Fitzgerald June 28, 2013 at 11:25 am

That is not a bad call, DB. My instinct tell me we could get a good reversal right now too. Of course I also think it is just going to be a strong bounce to sucker in all the sidelines gold investors who have been dying for prices to change direction. They will get their wish but be left holding the bag once more as the bear trend asserts itself anew. Don’t we all love contests though! They are always a great way to humiliate yourself while having some fun. Honestly, my initial reaction would be call 750 but that is so preposterously low it cannot be right. I will make a bottom call therefore at 968. which has more reasonable probabilities. Anyone looking at long term charts though and seeing just how steep this sell-off has been? It has all the markings of a collapse in relative terms over time judging by how precipitous this decline has been. Certainly the chartists cannot be taking comfort from the menacing look of those graphs.

db June 28, 2013 at 4:45 am

Crusty – just realized you beat me by 3 mins (I posted the same in the chat room). Maybe I’ll get to go to 3 flags.

Marc Berman June 28, 2013 at 4:51 am

A money manager in NYC was quoted on Bloomberg tonight that he believes there will be panic redemptions of GLD that will take gold to $800, so I’ll predict $850, for no other reason that it is the second time that I read a potential bottom to $800 (don’t remember my first read on that, but it was about 3-4 weeks ago). Isn’t that fun.

bachus June 28, 2013 at 7:08 am

We have just seen one of the best opportunities to make money , i think ds1 , put it best one night -” like shorting fish in a barrel”. This market is to make money in , it doesnt go one way, its actually immaterial if the bottom is in or the top! It’s moving and its fast, that means opportunity, forget the bottom or top , just trade the thing. Sideways markets is where all opportunity is lost.
This is good!!

J June 28, 2013 at 7:17 am

Looking for 965

quixote June 28, 2013 at 3:01 pm

1079 and keep the Jersey shore!

&&&&&

Newark is the Jersey Shore like the South Bronx is Sutton Place. RA

Dave June 28, 2013 at 4:19 pm

Mercury Retrograde, as described here last week, went from foreshadow period to retrograde on 6/26/13. In the past, the first 1.5 weeks are usually most intense, so gold could keep falling during this time before a bottom along with already increased market volatilty before subsiding when Mercury goes direct on 7/20/13. This MR is all in the sign of Cancer. Tesla was first traded during Cancer so will be interesting to note its price swings.

&&&&&&

Dave: Let me go on record as saying I am more than a little skeptical about using astrology and planetary alignments to predict the markets. It’s not that I do not believe that the stars and planets move the markets; for surely they must. It’s just that no stargazer I’ve come across, including Arch Crawford, has been able to read the signs well enough to make money at it consistently. If you would like to demonstrate otherwise, then I’d encourage you to try. But a forecast of increased volatility in gold, possibly with a downward bias, hardly suits that goal. RA

Dave June 29, 2013 at 5:32 pm

Rick, This is my own observation based on MR past events and what has occurred since 6/10/13 when MR began what is considered foreshadow period, not a blind prediction. I’m saying, generally, the next 1.5 weeks should be the most volatile for MR affected events and I expect gold to continue to go lower, which concurs with your GCQ13 new low update for subscribers which I won’t post publically. In a past MR, gold hit an all time high which MR could not have predicted prior to its start, only that one has to observe events when MR begins to see the trend.

Bam_Man June 28, 2013 at 5:34 pm

Are these people calling for $850/oz Gold aware that the oil price has not budged and is still above $100/bbl?

The last time Gold traded at that level back in 2008 oil was at $55/bbl. Even at today’s gold price, it is uneconomical to mine.

Robert June 28, 2013 at 5:53 pm

Gold is now firmly in the hands of speculative Momentum traders.

The divergence between the price of Silver and the SPX has either:

a) Presented the mother of all long silver/short S&P spread trades, or

b) Re-defined reality.

This divergence suggests that Silver will never again be required for Solar panels, electronics, medical equipment, and weapons (1/4 of all annual global silver production is permanently destroyed in explosions during US military exercises)

The biggest commercials are long Silver (and going longer by the day- remember, every sell along the path of this “falling knife” has a willing buyer on the other side.

I suck at picking tops and bottoms, and I don’t have time to watch to spikes on hourly charts, but I do how to spot a bargain.

If I wait for $10.00 silver to buy, then something tells me it will reverse course at $10.01…

therefore, I buy more today.

I also (finally) looked at my portfolio of mining shares- I see the opportunity to double-down on a couple prime positions with a cash expenditure that is only TEN PERCENT of my cost basis…. no brainer.

Parabolic moves down should be bought more aggressively than parabolic moves up should be sold. The multiples to the downside are shot once 80% of the market cap has been stripped off.

May fortune favor the foolish. I’ll check my portfolio again in 3 years.

dst June 28, 2013 at 7:20 pm

I am little confused….

*****

Your posts are not welcome here, Popowich. Can’t you take a hint? RA

Hueofman June 28, 2013 at 8:31 pm

After reading the articles and forums that are put out there I ask myself could Japan’s multi-decade depression be a harbinger for the whole world? i.e. a rapidly aging population, depopulation of rural areas, 33% of labor force working as part-timers, new graduates unable to get jobs, local councils unable to meet social spending, rising health care costs, etc?

gary leibowitz June 28, 2013 at 11:13 pm

Gold has bottomed at 1924. We all know 2 years ago the FED confiscated all the gold in all the banks reserves, forced dealers to liquidate their position, and manipulated the market quotes. The real value today is 2356.

Nice little bounce today.

Jill June 28, 2013 at 11:21 pm

Gary, to be clear, above, you expect tha market to move back down to at least 1558 and possibly to as low as 1508? Is that what you are saying here?

gary leibowitz June 29, 2013 at 12:50 am

Yes, in a short time span, perhaps by next week.

I am playing a dangerous game since I do see this as only corrective in nature. In fact the sharper the downward pressure, along with the steeper drop, would have me believe we snap back that much faster and harder. I am now more inclined to believe we only hit the 1558 upper range and a new leg up with no dynamic fast moves. I played this because of my impatience and the fact that I made good money on Gold. Normally I would wait it out and “look for” the lows before betting a trend.

Please remember that my short term timing has not been good. I normally play the trend after it gets established.

I wonder if Ricks 1220 was so far fetched since it has quickly rebounded. The chart is also showing a double bottom around 1187. I now give the odds that we have seen a bottom at over 75 percent. Lets see if 1254 gets taken out quickly.

Frank June 29, 2013 at 3:41 pm

I am so simpleminded. Can not understand how or why gold and most commodities are falling when there is excessive money printing by all nations. Worldwide deflation(depression) is the only explanation that makes sense to me. Can even greater amounts of money printing reverse this trend? If not, then gold is the only investment that makes any sense. My guess gold goes no lower than the 1980 top.

Freddie June 29, 2013 at 4:50 pm

Unfortunately Nostradamus is not a subscriber to Ricks Picks, this is the perfection we need to pick the GC bottom. A ninja trader in Ricks chatroom laid out the HP forecast for a reversal to 1220, so we had a personal Nostradamus for real time actual trading….. The 1226 level was/is a key pivot from 2009. Was yesterday end of day short covering all the way to $ 1234 to show profits to Hedge Fund and Commodity Fund investors for the first half YTD ??— notice the buying of GC in volume early in the day (planned…..?) and sell off of ES after running it up at the close. These are the questions for Nostradamus. In the meantime, some big players like
Jeffrey Gundlach the founder of Doubleline Capital #1 money manager and $ 60 billion under management said “gold was dead” until $ 1000 on TV Thurs. Other pickers like the CEO of Colony Capital said Friday “we will soon see what the true cost of production of gold is” and has his team ready to buy Gold Miners equities…….soon was not defined. For futures traders attempting to make money every day, each of these 30-50- pt. swings provide a great opportunity, so I am at the ready to reverse my stops to avoid losses and continue making money. Alot of pickers picker $ 1400 bottom because “Asia” was stepping in buying physical and the US Mint was running out of silver blanks. Now India has put a 6% tax on gold imports and gold brokers are going on strike. China has fake GDP numbers, with ghost cities. I have a client who just returned and he said there are 30 million empty housing units, and “alot” of ghost cities built with infrastructure in place but no one to buy and move in. DEFLATION is in place now. Whats the bottom is Copper? Whats the bottom in GLD ? The selloff on GLD continues with fury as all the bandwagon buyers on the upside since it was created in 2004 are sellers all year and switching to equities? Maybe the bottom in GC is 2004 when GLD was created to create electronic gold for the masses. Maybe the miners will redefine what it costs to mine — Barrick has a different number than the smaller companies, but it also has $ 2 billion of cash on hand. Futures are forecasting the future, and the forecast is for less QE, which if you look at the GC chart many of the major impulses of hundreds of dollars were after the FED announced another QE round, with the US dollar tanking in a downtrend. Now, the dollar is in a rally trend, interest rates are rising and inflation is not existant, deflation is the global trend as emerging markets wean themselves over a global QE liquidity binge. The emerging markets ETF has been hammered for a month. The Euro has somehow survived the last round of beatings and is strong, although Europe is in recession. Last summer it was a crisis in Europe and the Euro was heading to 20. Was Cyprus the Canary-in-the-goldmine for gold ?? So far, yes. For daily trading, however, gold has to blow past 1274 again and close above to get real bullish in my opinion. July has traditionally been the weak month for gold. So if this is a bottom, it’s a bit early if history is looked at. UBS put out a $ 1050 forecast this week, as did Goldman Sachs, and of course a day later we broke the $ 1274 level. In closing, Apple stock was at $ 700 last year and now is at $ 396. Is this the bottom for Apple and Gold ? This is where you really need. Nostradamus. Rick, maybe the Astrology picker in the chatroom can align the stars this weekend for the answer. Trading either way for GC, however, is a tremendous opportunity today. Much more profitable than sitting in a $ 10 trading range for weeks. If you a ready for the reversals on the one minute chart, you do not need Nostradamus for the “bottom.”

Rick Ackerman June 29, 2013 at 6:24 pm

Great post, Freddie. I hope we hear more from you in the future.

Incidentally, in the past I have featured here the predictions of a friend, ‘Rishi’, who has studied Nostradamian prophecy for many years. Based on his understanding of Nostradamus, Rishi’s outlook for the next 25 years is so grim — including two World Wars, global famine, disease, cataclysmic seismic events and billions dead — that (at his suggestion) I have refrained from repeating them.

martin schnell June 29, 2013 at 11:00 pm

China and gold are interesting.

One of the reasons that real estate there got so hot, and why there are shadow investment companies, is that the average Chinese person has few places to put their money. The banks pay little in interest and they all know that the banks are not exactly safe. Throughout Chinese history when there is chaos (not that rare), gold has been the go to asset to protect wealth.

We now have huge Chinese money outflows by the rich (into foreign real estate, foreign businesses as the rich try to keep their wealth safe.) For the average Chinese person, gold is becoming the most attractive asset class (stocks going nowhere, real estate topped out). It can be bought in whatever amount you want and is liquid (within China).

I expect as the Chinese economy slows and banks really start to have problems (NPLs), you will see a continued flow into gold at the retail level … and with 1.3 billion people that can be a fair bit of retail.

mario cavolo June 30, 2013 at 2:41 am

Nice China/gold point Martin. I just bought some silver at $18.50 in my icbc acct here in Shanghai for a likely bounce…

China DP is indeed a ludicrous stat along with others, Freddie but ghost cities an far overblown western media notion riddled with misunderstanding…

Cheers, Mario

Bob June 29, 2013 at 5:01 pm

If we have not bottomed, then I’ll throw in a bottom at 1147.10. Chart w/pattern posted in the chat room. The question will be, if it gives us a bottom here, is it a major reversal to new highs or just a few weeks of bouncing around before pushing further south? The price relevance of the several markets to the overall economy is so screwed up Nostradamus wouldn’t have a clue> :) )

Freddie June 29, 2013 at 6:29 pm

PS — Jeffrey Gundlach the founder of Doubleline Capital #1 money manager and $ 60 billion under management said “gold was dead” until $ 1000 on TV Thurs. — He then said it would bounce to $ 1800……!!

Freddie June 29, 2013 at 7:15 pm

Final PS — Physical gold buying is not affecting the futures traders and the bear market trend down. Look at the US mint figures for the last five months. Records amounts of metals sold in gold, and increasing in volume every month. The saviors of the long, buyers in Asia, bought the first bounce but now are silent, as physical buying has not been the same stampede with the India gold tax and the now obvious problems in China. GC futures, on the other hand, can be traded in such vast larger quantities with the leverage. Its a thin market, its not market manipulation — futures are a zero sum game. On a few days I have traded $ 25,000,00 in gold — thats not with $ 25 million, but with a $ 200,000 account and 10 lots back and forth. In conclusion, if I had the capital that JP Morgan, Goldman Sachs and UBS has on their trading desks, with a thin market such as GC and the huge leverage ==its a great money making machine. If the haters of the bank proprietary trading desks had that same capital, then they would become lovers. Its a bear market chart since $ 1800 last October, so to reverse is in the hands of the big players trading billions not my baby millions — we can only hope to trade their moves profitably. I am studying Ricks HP system and this will be another tool in the toolkit to be my own personal Nostradamus. I’m giving myself a year to learn it correctly — he has said in one of his webinars that if you finally master the HP trading method, the GC futures trading on a one minute chart will be highly successful. Since he was the Nostradamus of the $ 1414 short call on gold early this year, and the chat room ninjas are making some great calls, I recommend the course to any bottom-forecasters who actually trade daily. For the long term holders, I have no solution. Wait until the BOND FUND holders who purchased Vanguard Bond Fund at the beginning of the year open their July statements — expecting a “safe” investment and a 3% return — now the fund is down Minus 3% year to date. Pimco All Return Fund lost big last month. Since the creation of the Federal Reserve in 1913, Central Bankers worldwide trying to control economies has never worked successfully in the long run, and this is the biggest global QE experiment and liquidity infusion ever pumped into the global economy. Now we have a new set of Central Bankers, but are they repeating history — except now we have Junk Bonds, Mortgage Backed Securities, and Credit Default Swaps leveraging up trillions. For a historical wake up call, a have read this book: http://www.amazon.com/dp/159420182X/ref=tmm_hrd_swatch_0?_encoding=UTF8&sr=1-2-fkmr0&qid=1372525968

Comments on this entry are closed.