Gold Update

There are increasing signs the low is in for gold

1. Huge reversal bar in overnight trading, low of $1211 and a high of $1251!

2. Oil has taken off, it is the elephant in the room for the commodities index, it was inevitable that gold would follow. Oil has definitively broken it’s declining trend line.

3. Positive divergence in the slow stochastic and true strength index (TSI) on the gold price chart before this big reversal bar

4. On the GDX chart there was positive divergence in the TSI indicator and the relative strength indicator (RSI) was flashing a low

5. In the unhedged gold miners index, the HUI, the moving average convergence/ divergence indicator (MACD) was rising as the index was falling, so money was moving in to get ready for a reversal.

I was expecting the reversal last week but it was nice to wake up this morning to see the $1215 low I was looking at last night completely wiped out. Understanding time is so important when reading markets and my mentor in this area is Gary Savage who has been calling for a reversal for the last week.

God bless

Kevin

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