Hello everyone, Adam Hewison here coming to you from the digital studios of MarketClub. Yesterday, the Barrick Gold Corporation (NYSE:ABX) had a major trend change to the upside signaled by a new green monthly Trade Triangle. It's the first buy signal ABX has had since it began its move on January 7, 2016. At that time the signal was it $8.33 and the market moved as high as $23 before pulling back.
Today I have put together five different charts that show why I believe Barrick Gold is headed significantly higher.
About This Stock
Barrick Gold Corporation (NYSE:ABX) engages in the exploration and development of gold and copper properties in the United States, Canada, Australia, Argentina, Chile, Peru, the Dominican Republic, Papua New Guinea, Tanzania, Zambia, and Saudi Arabia. It primarily explores for gold, copper, and nickel deposits. The company's main properties include Cortez, Goldstrike, Pueblo Viejo, Lagunas Norte, and Veladero. As of the end of 2015, ABX had proven and probable gold reserves of 91.9 million ounces; and 11.7 proven and probable copper reserves of billion pounds. Barrick Gold Corporation was founded in 1983 and is headquartered in Toronto, Canada.
In chart number one can see that Barrick Gold broke over a 52-month long-term negative force line (1) and moved as high as $23 a share (2) before pulling back 50% (3).
It’s always such luck to find something when you really need it. I didn’t update the monthly chart for silver from July as we need to give time to the market for visible changes. I am very thankful to regular readers who comment on my posts and doing so; they give me a feedback with a clue of what you really need or what is your biggest concern. Last week one of the readers asked why I put short term setups with a bullish view. I answered that as long as the market broke above the medium-term downtrend, we can watch the upside. Today I would like to update the monthly chart as it is always better to see once than to read/hear about it many times.
Call it the Trump Rally, or any name you like, but the stock market certainly came alive when the election swung in Donald Trump's favor. While all eyes are on equities, other things are going on in other markets that you should be preparing for.
Today, I'm going to take an in-depth look at the gold market that has been out of favor the last several years. Gold (FOREX:XAUUSDO) did enjoy a strong rally in the first half of the year and was a top performer. Since moving close to $1400 in July, gold has steadily eroded down to around the $1,180. The question now is, is gold going to continue on the downside or begin to stabilize and start looking forward to what could be an inflationary future? With that in mind, I decided to look at three market keys that could unlock gold and determine its future.
Long-Term Negative Force Line
FIG 1. I have drawn a long-term down sloping trendline starting from gold's all-time high of around $1900 and connected it to several other high points over the years. To be a valid technical trendline, it must touch three points. When that happens, it confirms the validity of the line. The long-term negative force line seen in FIG 1 is the dominant and number one element that will determine which way gold is headed in the future. I would consider a move over the $1375 - $1400 (3) levels on spot gold as a major signal that gold has changed direction to the upside. When this happens, and it will happen sometime in the future, gold will enter into a multiyear bull market. FIG 1 is the number one technical aspect for gold and should be watched closely in 2017.
What is fear? It’s our emotion about something uncertain or unknown as it is natural for human beings to avoid risks. Someone said that to stop fearing it is good to face it as quite often it is only our mental illusion and has nothing common with reality. Another wise person advised looking at a larger perspective to cut the noise of the market to keep above the vanity.
I took both pieces of advice and combined them into a single weekly chart below.
Chart 1. Gold Weekly: Roller Coaster – Let’s Face The Maximum Fear
Chart courtesy of tradingview.com
On the multi-year chart above, we can clearly see that the global map of the market didn’t change for the past 3 years and we are still at the levels seen in the three previous years. Almost a year ago at the end of November 2015, gold hit a new low and set the new edge of the range with a fresh downside at $1046 and the upside at $1434 (August 2013 maximum). Right now the price is almost at the center of the range. Continue reading "Gold Takes Bugs On A Roller Coaster Ride"→
In this post, I would like to share with you the comparative dynamics of gold and top gold stocks starting from the date when the recent local bottom of gold was set at $1241 on the 7th of October, 2016 to see how top gold stocks reacted to the recent gold reversal.
Chart 1. Gold And Top Gold Stocks: Not All “Birds” Flew To The North