Support the Wall Street Examiner! Choose your level of support to receive a free proprietary report as my thanks. Click the button below to see your options. Become a Patron!

Here Are Your Latest Gold Spot Price Moves and Forecast

This is a syndicated repost courtesy of Money Morning - We Make Investing Profitable. To view original, click here. Reposted with permission.

As the U.S. markets have moved sideways in the past week, gold has been in consolidation mode. Today the gold spot price is around $1,223.20 – down $9.50.

Liquidity moves markets!

Follow the money. Find the profits! 

As the U.S. markets have moved sideways in the past week, gold has been in consolidation mode. Today thegold spot price is around $1,223.20 – down $9.50.

Gold traders have done some profit-taking as the gold price has bounced in a range between roughly $1,205 and $1,235 over the past trading week. But the gold spot price has stayed above the $1,200 level, which has helped to paint an increasingly bullish picture.

Technically, we’re getting an emerging pennant pattern that will have to resolve itself before long. Will that be to the upside or downside?

Let’s look at what will determine that direction.

What’s Moving the Gold Spot Price

The gold price started this week dropping to $1,203 on ounce, but rose through the day to peak at $1,212 and to close at $1,208.

Interestingly, despite the weak start, gold climbed the next day, closing at $1,225. Wednesday turned out to have a strong start, with the gold price spiking to peak at $1,248, but then it gave up all those gains to end NY trading at $1,228.

On Thursday, Feb. 25, gold ended the day at $1,234.

As this week of trading went on, I couldn’t help but gauge how gold’s behavior seemed to be the opposite of the broad stock marketmovement. Here’s a chart to show just how contrary these two asset classes behaved in the past week.

Of course it’s not a perfect relationship, but the opposing direction of the gold price and the markets is stunning:

2 26 16 gold spot price 1

And that same relationship is also quite impressive over the past three months:

2 26 16 gold spot price 2

Now let’s see what’s been happening behind the scenes to help gauge where we may be headed next, starting with a remarkable new report…

What’s Moving Gold Prices Next

In a recent report the World Gold Council (WGC) highlighted that rolling four-quarter mine production fell in Q4 last year. It amounted to a 3% decline year over year, but what’s remarkable is that this was the first of its kind in over seven years.

According to the WGC, “Declines were geographically widespread and due to a range of factors including lower mine grades, mine closures, and mechanical failures.” That’s a bullish fundamental sign.

Gold Chart: Rolling Four-Quarter Mine Production

2 26 16 gold spot price 3

Commerzbank reported that the gold exchange-traded fund (ETF) inflow ending on Monday, Feb. 22, reached nearly 50 tonnes over just two days. That was the strongest two-day inflow since May 2010, when the Greek crisis hit.

And on Feb. 25, Commerzbank also reported that gold ETF holdings had risen for 10 straight days. As well they pointed out that since the start of 2016, Bloomberg-tracked gold ETFs have bulked up to the tune of 215 tonnes, or 14.7%, and a massive 160 tonnes just since February.

Looking at the technical picture of the gold price, we see a pennant formation emerging over the last couple of weeks.

2 26 16 gold spot price 4

This is a continuation pattern that I’ve highlighted with green lines. As we reach the apex of this triangle, we’ll have a clearer idea of whether the gold spot price decides to break out to the upside or downside.

At this point, I think it’s still too early to say. While there is plenty of momentum on gold’s side, its recent gains may need to be digested first. And that could mean some weakness before the bullish action returns. Perhaps the biggest determinant will be the direction of stocks.

I’ll be sure to watch this closely for clues on near-term direction.

To get full access to all Money Morning content, click here

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

Disclaimer: © 2016 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.

The post Here’s Your Latest Gold Spot Price Moves and Forecast appeared first on Money Morning – We Make Investing Profitable.

Wall Street Examiner Disclosure: Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. No endorsement of such content is either expressed or implied by posting the content. All items published here are matters of information and opinion, and are neither intended as, nor should you construe it as, individual investment advice. Do your own due diligence when considering the offerings of information providers, or considering any investment.

Try Lee Adler's Technical Trader risk free for 90 days! Follow the money. Find the profits!

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.