360° Coverage : Breaking: Gold May Be On The Verge Of A Waterfall-Style Decline

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Breaking: Gold May Be On The Verge Of A Waterfall-Style Decline
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Breaking: Gold May Be On The Verge Of A Waterfall-Style Decline

Dec 19 2013, 4:47pm CST | by

In the past few hours, gold sliced right below the $1,200 support level that I showed earlier this month: Source: Finviz Though silver took a hit, it’s still above its $18 support, but it’s a fast-...

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43 weeks ago

Breaking: Gold May Be On The Verge Of A Waterfall-Style Decline

Dec 19 2013, 4:47pm CST | by

In the past few hours, gold sliced right below the $1,200 support level that I showed earlier this month:

Source: Finviz

Though silver took a hit, it’s still above its $18 support, but it’s a fast-moving market, so a break below this level can happen quickly:

Now that gold broke below its support level, another sharp decline – including what I call a “waterfall-style decline” – is looking increasingly likely. I suspect that another wave of selling may commence when the Asian precious metals trading session starts in a few hours from now (it’s Thursday afternoon in New York as I write this). If I was planning to short gold, I would make sure that I have a stop-loss order in place to exit the trade in case gold manages to rise back above the $1,200 level, creating a bear trap.

As I showed in my last gold and silver analysis, gold mining stocks experienced a serious technical breakdown in late-November, and I said that gold mining stocks have a tendency to lead the gold market. It looks like this indicator is on the verge of proving its worth once again, even though it is still early.

Source: Stockcharts.com

If gold’s technical breakdown fully plays out, the next support level (and thus price projection) is at $1,000, which is both the 2009 highs as well as a psychologically important round number, which matters a great deal in financial markets:

Why is gold dropping despite all of the central bank money printing in recent years? I have a very different take on this issue than most commentators: I believe that global central bank stimulus is creating what I call a Bubblecovery or a bubble-driven economic recovery that is fooling the whole world into becoming less fearful, which is reducing demand for gold as a safe-haven. I believe that the eventual ending of the Bubblecovery will cause another global economic crisis that will prove to be highly beneficial for gold, even though gold may have further downside in meantime.

As a reminder, if gold manages to break back above its $1,200 support level, I would no longer be inclined to hold a bearish short-term view on it.

Please follow me on Twitter, Google+ and like my Facebook page to keep up with the latest bubble news and my related commentary.

(Disclaimer: All information is provided for educational purposes only and should not be relied on for making any investment decisions.)

Source: Forbes Business

 
Update
2

7 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforce ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

7 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of MH370 and ...
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