Has the Gold Market Topped Out?

Posted on by The INO.com Team

Has the Gold Market Topped Out?

That is the big question on many traders' minds as gold fell from a high around $1,070 to the lows seen earlier today.

In my new video that was shot at noon on Tuesday 10/27, I go into detail on what I think is going to happen to this market. I think you will see a refreshing view of the gold market and also the strategies that we're employing to take advantage of the next big move in gold.

As always our videos are free to watch and there is no registration requirement. We would really like to know your views on this market and if you agree or disagree with this video. Please feel free to post your comments on our blog.

All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub

32 thoughts on “Has the Gold Market Topped Out?”

  2. Hello Adam,

    I want to thank you for your clear charts and your honest and integer comments that you present on your website like the chart about gold.

    What is your opinion about gold stocks?

    Are they going to the moon soon or not?

    I live in Holland and I have gold stocks and invest in gold companies listed on the TSX and TSX.V that's why i also have a currency risk concerning the Euro and the Canadian Dollar.

    Do you think the Canadian Dollar will follow the US Dollar in his downtrend or do you think the Canadian Dollar will be stronger in het near future then the US Dollar and what do you think of the strength of the Euro now and in the future?

    My aim is to get a huge return on my gold investments because i think the gold price will only go higher in the coming 5 years.

    I would like your opinions.

    Kind Regards, Ruud from Holland

    1. Ruud,

      I like gold on the long side for the intermediate term.

      These are for the most part trading markets and as such you have to treat them that way.

      All the best,
      Adam

  3. Hello Adam, I was wondering what is the best strategy to enter a position?

    1. Dollar cost average as the stock incrementally goes up?
    2. Dollar cost average as the stock incrementally goes down?

    OR

    3. Go in all at once when you think it hits it lowest point retracement level?

    1. Leo,

      Good question and thanks for your feedback. The very question must be answered on an individual trader level.

      If you are looking at Fib retracements the 50% and 61.8% points are were you should be putting on positions in my opinion.

      We recently saw that happen in several major markets and it seems to be working well.

      I would go with # 3.

      All the best,
      Adam

  4. Dan,

    Please study the period from October 2007 to March 2008 to see the S&P tanking, the dollar tanking, and gold rising.

    Also, please study the period from November 2008 to February 2009 to see the S&P tanking, the dollar rising, and gold rising.

    Regards,
    Chris

  5. Good luck getting a decent long trade in gold.

    S&P tanking = US dollar rising = Gold tanking

    Shorting gold and other commodities is more fun anyways because money comes to papa a whole lot quicker.

    Cheers,
    Dan

  6. I really appreciate your insightful market commentaries - my question is what will happen to the stock market if gold resumes its upward trend in the coming weeks. Right now gold and the general market seems to be moving in tandem.

    Any thought on this?

    1. Simon,

      Thank you for your feedback.

      I just answered this same question for Akira: Here is what I said:

      It’s been my experience that markets move in tandem until they don’t move in tandem anymore. It is very possible that gold will disconnect from the stock market some time in the near future. At the moment it appears to be wedded to the equity market.

      No one can predict when a decoupling is going to occur, you can only watch the markets to find out when that takes place.

      All the best,
      Adam

  7. Question: Gold is moving tandem with the stock market so far...moves seem determined by the USD. If the trend still hold true, doesn't that mean the market will go up along with the gold? If the stock market has topped, doesn't that mean the gold has topped as well unless there will be a disconnect between them?

    1. Akira,

      Thank you for your feedback.

      It’s been my experience that markets move in tandem until they don’t move in tandem anymore. It is very possible that gold will disconnect from the stock market some time in the near future. At the moment it appears to be wedded to the equity market.

      No one can predict when a decoupling is going to occur, you can only watch the markets to find out when that takes place.

      All the best,
      Adam

  8. Adam, You have felt strongly that gold will run into the end of the year, with strong buying on a pull back to 1025-1030. I currently hold GLD but have not taken profits as I have not seen a sell trade triangle. Would you advise holding for a resurgence into the end of year? Appreciate your feedback.

    1. Shawn,

      Thank you for taking the time to comment on our blog. Gold has now pulled back to an area where it should find support and I expect we will see more of a two-way market in the next week or so.

      We remain positive on this market until proven otherwise.

      All the best,
      Adam

    1. Chris,

      You have many options. You can buy coins, futures, ETFs, gold mining stocks. It all depends on your risk profile.

      All the best,
      Adam

  10. Adam: You may be right about further highs. However, note the triangle pattern just before the rush up to $1070. The minimum
    expectation after a triangle pattern is found by adding the largest
    portion of the triangle to the tip. So, the minimum expectation for
    gold was $1070, which is where it went. If the dollar continues going
    up, (I think it is due for a correction right at the moment.) commodities and gold are likely to come down.
    Thanks for having a great web site!

    1. Denis,

      Thank you for your feedback.

      The next several days should be very interesting for gold. I'm looking for the Fibonacci retracement levels to offer good support for this market. The Fibonacci 50% retracement comes in right around the 1027 and the 61.8% fib retracement comes in around the 1017 area.

      I think the pullback has pushed a lot of people out of the market and I expect that we will see more of a two-way market in the next week or so.

      All the best,
      Adam

      1. Adam, you have a GREAT site and very informative. Can you give some insight regarding silver (poor mans gold). I purchased at $18 (on margin) thinking it was going to 20-25 over the this quarter ... it bumped around for a bit then crashed. I am looking at support here at $16 and hoping, as per gold, that it will turn and run up. What is your opinion ... do i try and ride this out for a while?

        1. Ian,

          I don't follow silver as closely as I track gold. So I really have nothing to say positive or negative.

          Sorry I can't offer more that that.

          All the best,

          Adam

  12. I really learn a lot watching these videos, but I thought this was a bit more opinion that objective analysis.

    Lets face it, the big move in gold was from mid-200 to mid-1000. Now it seems everyone wants pile on. That's usually the sign of a top.

  13. Hi Adam,

    I trade GLD and I see the same pattern there too. This pullback is a buy opportunity but the score for GLD is 55 and as per Market club suggestions I one should stay on the sidelines. So stay out or buy? It may pullback more before it resumes its uptrend.

    Thanks,
    Trikaal

    1. Trikaal,

      Gold is now just coming into the Fibonacci numbers. I expect that we will not see gold below $1,000 for the balance of the year. I am looking at between $1,027 and $1,017 to be a buyer.

      The energy field that is below gold is enormous and I expect that when all the selling is over we will see gold move up to the $1,250 levels.

      All the best,

      Adam

      1. Adam:

        Kinda new at this. Question? Price movement in Gold seems to be directly correlated with price movement in equities. Your mega trades for the 4th quarter reccommended a falling S&P and rising gold. Current price movement suggests this is not possible. Can you explain?

        Thanks,
        Kevin

        1. Kevin,

          Thank you for your feedback.

          Q4 is not over yet and let's see how things play out for the next couple of months.

          Regardless of how I feel about the market the market determines its own direction eventually.

          All the best,
          Adam

        2. Hi Adam,

          I have a similar question and would appreciate it if you could shed some light on the issue. I watched your videos: Has the SP index topped out for the year, and Has the Gold market topped out for the year. If I understood you correctly, you seemed to suggest that the SP index probably has topped out, however, the gold market still has more room to run. The charts for UUP and SPY since March 09 show an inverse relationship between stocks and the dollar. The march bottom in stocks coincides with a top in the dollar and they have moved in opposite direction since. The same inverse relationship also appears to be true between gold and the dollar. So if the SP index has topped out, it would suggest that we're going to see a rise in the dollar. But if the dollar is going to rise, that would not bode well for gold either (as well as other commodities such as oil).

          To be clear, I am not disputing your assessment of the market. I very much respect your expertise and would like to learn from you. Assuming that your calls are correct, please help me make sense of this scenario so I can be a better trader.

          Thank you.

        3. Rick,

          One of the observations I have been able to make over the years about the markets is this.

          Relationships just as in life couple and decouple. There is no bell to mark this happening it just happens. We may be seeing that now as gold was rallying on Friday as the equities were tanking.

          Thanks for your feedback.

          Adam

  14. I'm not sure that going back to the last low is the right choice to make to get your fib numbers. Gold's 18 week primary cycle started back in early July and has just topped out, so rerun the fib tool using the early July lows and you will get different targets and then look for the low ideally before mid-November (but it could come a little early or late as 18 weeks is gold's average primary cycle length)

    1. RC-I am not a technician, but have followed gold for some time,and consider myself more of a position trader, than day or short term. My question would be to include July and August in the technicals, would seem to send mixed signals, as those months adjust the charts for the seasonality of the metals? I prefer a cleaner model in looking at the movement of stocks or commodities sdjusted for the seasonality of the equity/commodity. Of course you could throw that out for the grains espcecially corn, soybeans and wheat this year. Though historically we are normally at season lows on those grains-to damn much rain.

      Dennis

  15. Thank you for your videos with charts and straighforward explanations. They have been a big help to me in trading these sometimes treacherous markets.

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