Last week I wrote about the new buy signal that my gold price range indicator gave after it signaled the start of a larger or longer lasting correction in August. Now it looks like the correction has ended and the announced upward trend reversal has already taken place.
The next upswing in gold is now imminent
As the sentiment indicators I used show, this three-month consolidation has significantly dampened the sentiment on the gold market. Skepticism is again as widespread as, for example, at the end of last year – although the gold price is around 25% higher than it was then.
This is typical of healthy corrections in bull markets. They create great uncertainty and discourage many investors from seeing them as a buying opportunity. This paves the way to new highs. So whoever overcomes their uncertainty and buys now will most likely be richly rewarded.
Bullisher chart of the gold mines index
Almost at the same time as the buy signal from my price range indicator, the XAU Goldminen Index had almost reached its rising 200-day average line at the end of November, which is considered technical support. As you can see on the following chart, the lower limit of the chatting-technical wedge formation and the upper limit of a support zone starting at 130 points also run in this area. So you are dealing with a triple support here.
Corrections in bull markets often take the form of a wedge formation. Therefore, wedges are generally considered to be bullish formations. If its lower limit is then reached together with another support line, as in the present case, the bullish signal given is particularly reliable.
XAU Gold Mines Index, 2018 to 2020
The correction in precious metals stocks is over.
Buy selected precious metal stocks now
From a fundamental point of view, numerous gold and silver mining stocks are valued very cheaply. And from a technical point of view, some of them are giving very clear buy signals that point to high price gains. Don’t let these opportunities slip by. You can read which stocks these are in my stock market letter Crisis-proof investing – now 30 days free of charge.
I wish you a nice weekend,
Claus Vogt, Editor-in-Chief of Crisis-Safe Investing
P.S .: As my indicators show, the general stock markets are now extremely hot. A downward trend reversal is emerging here.
P.P.S .: If you want to get through this crisis week after week, please ask for the free Claus Vogt market commentary today hereeasily with your email at.
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