ST Outlook – Gold (17 October 2011)


There is not very much to say about Gold today. Price has continued to struggle upwards in a very weary manner, and still needs to form a clear 40-day cycle peak.

Gold struggles into the peak projection box

Price is still “rising up” the 20-week FLD, and several other FLD’s. It is expected to break through all of these FLD’s which would provide a final stamp of confirmation on the peak (of at least 18-month magnitude) on 6 September 2011.

FLD levels

Confirmation of the latest 40-day cycle peak will be provided by price crossing below the 20-day VTL, shown here (with the 10-day VTL):

VTL levels

And so the price of Gold is expected to fall lower over the coming months.

I am often challenged by friends who believe that Gold will form a “safe-haven” when stocks tumble, and they ask how I resolve the “dilemma” of these two bearish (and thus supposedly contradictory) analyses (read the ST Outlooks for the S&P 500), claiming that “everyone knows” that the Gold price rises when stock markets fall. In fact nothing could be further from the truth. At times the two have an inverse correlation, because the cycles that influence the price of Gold are different to the cycles that influence the prices of stocks, but there are as many times when the two markets have a direct correlation and move in the same direction at the same time.

The solution to the “dilemma” is (need I say?) in the study of the cycles!


About David Hickson

I have been trading for over 20 years, but only had any success after discovering Hurst's cyclic principles. Unable to find any software to speed up the analysis process I created Sentient Trader software, which now pretty much does all the analysis for me. I am a film maker and a TV director, but nowadays I mostly provide consultation services to professional traders and fund managers, helping them to integrate Hurst analysis into their trading. I'm South African and live with my family in Italy.

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