For most of us the reason for price movements, can be pretty masked most of the time. This latest weakness in Gold, has a clear reference to China, as shown in this LINK , based on China’s vacation week, its National Days which ended today. The charts in the linked article give graphic representation of this phenomena going back to 2013. I think the data exist further back but this is quite graphic and worth a look in my opinion.
Got to be one of the prettiest Bull Candles I’ve seen, rebounding as if they had read my forecast for the end of Gold weakness. CCI is an element I use here, helping Bird-dog or Point turning junctions.
Now, keeping the same vehicle, lets look at the 200 Day Moving Average, and refer to On-Balance-Volume.
Here the 200 Day Moving Average is the mean, constructed for the last 10 trading months, so its stable. Notably, at the peak of this leg, in early September GDX was 30% above the 200 Day Moving Average, almost completely over-extended until the decline in October. Today the GDX is 10% above its 200 Day Moving Average, in what I think is a completely sustainable position. For most uses, the 200 Day Moving Average provides a stable mean to compare daily prices with as to determine trend. This is a Bull Trend now.
On-Balance-Volume (gray line behind price) provides a check on the validity of a price move, going in directional correlation to the price. Deviations and divergences from that correlation make me skeptical of the integrity of the price movement. MACD is in a low position, below zero, perhaps bottoming. Turning up in a bull move would signal good strength, the kind you want under a Good Buy.
Relative to previous Recco’s and recaps, all are in good standing, not surprising, the strongest and weakest have swapped positions as this Precious Metals market get itself together to resume its up trend.