Source: Barry Dawes
August 22, 2023 (Investorideas.com Newswire) Barry Dawes of Martin Place Securities looks at the gold sector as he believes sector sentiment has declined into a major Buy zone. Dawes states previous gains from these lows averaged 95%, valuations look cheap, and AU$ gold is back close to AU$3000/oz.
Gold
Gold is trading lower below US$1900, along with the rise in bond yields.
The US$ remains strong, so the downward pressure remains.
However, that downward-sloping wedge remains in place, and last week saw some increase in volume.
The Commitment of Traders (CoT) indicates that commercial players have significantly reduced their short positions while the speculators have increased theirs, so a break out from this wedge could occur soon.
The longer-term parabola is holding well, and as pointed out last week, the 2011/12 highs and other more recent trading activities show good long-term support at these levels.
The gold price in AU$ is very close to AU$3000 again, and it's technical position has its own parabola and good support at the July 2020 highs.
This would suggest prices might not be heading much lower from here.
In the shorter term, the AU$ gold price has another even more encouraging parabola setup.
US$ remained in uptrend.
Nth American gold stocks are also declining but into support around 110 on the XAU.
Just 1-2% lower.
Gold stocks have underperformed bullion over the past two years.
This ratio is in an important support zone, so there should not be much more downside.
As noted above, sentiment is very weak and has dropped to a Buying Zone.
The number of stocks above the 200-week moving average is now just 3.57% (probably only one stock in this ETF!).
Note that the four previous times this indicator was here and bottoming in its six-year life, there was a very significant rally in gold stocks.
These turning points are important to follow and anticipate the changes.
The AVERAGE is a 95% gain in this GDX ETF with a range of 44-183%.
The rally length range was 20-74 weeks, and the average was 38 weeks.
The ASX gold index is already in an important technical support zone with a low possible at 6100, just 2% lower.
And XGD vs. Au$ gold is also an important support.
Timing is everything. Head the markets, not the commentators.
More Info:
Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.
More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release and our other news services on the Investorideas.com newswire https://www.investorideas.com/News-Upload/
Global investors must adhere to regulations of each country. Please read Investorideas.com privacy policy: https://www.investorideas.com/About/Private_Policy.asp
