PX: Downward Trend Again?

Though I know the economics of gold, still it is difficult to see the price of a gold stock, PX going down. I saw it came down from 6.20 to 5.56 and then bounced back to 5.97 during the first two weeks of this month, from July 1 to 15. Today, it seems that a downward trend is happening again. PX's closed near its low price at 5.90.

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I am tempted to sell my PX shares and wait for this stock at the bottom and buy again. Two technical analysts told me that it could go down as low as 4.50 before it would bounce back again. However, despite the fact that the price of gold today is reaching another historical low, I changed my mind after listening to the video below.

I hope the speaker is right that we will see the price of gold and precious metals rally the end of July up to August. I think I heard him say that even until the end of this year.

By the way, here's the current price of gold: 

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Latest Updates:

1. From SchiffGOLD

Why is it difficult for the markets to learn?

2. From Peak Prosperity

"During the selloff, gold hit 1141.90, just 30 cents above the previous low of 1141.60. It did manage to rally back, but not all that enthusiastically. Based on today's behavior, I'd guess the next try at 1141 will succeed. If the buck continues to rally, next stop for gold is 1130."


"The miners looked even worse, with GDX off -2.28% on moderately heavy volume, making a new six-year low just today. Last time we were here: October 2008."

"The dollar rose +0.51 to 97.28, making a new closing high for this cycle and inching up towards the May high of 97.88. The continued move higher in the buck is pressuring gold; while we here in the US whine about how horribly gold is performing, over in Europe they see gold moving more or less sideways over the past five weeks and right now it is about at the middle of its seven-week trading range. This tells me gold's swoon is entirely a currency effect. Strong dollar = weak gold."

"This suggest to me, if the buck keeps rallying, gold will most probably drop through 1130 support."

"Oil has dropped to the lower end of its recent consolidation range. My code says oil has further to drop."

"The code also thinks gold and silver are due for a rally. I have noticed that the code can be early - I see further downside ahead, given the strength in the buck."

"The buck is strong. There is no good news right now in metals or in commodities overall. If the buck continues to rise, commodities including PM will most likely continue falling."

As of 18 July 2015:

"Gold, silver, copper, platinum, palladium, miners, oil - all of the commodities I track fell this week. Gold actually held up better than most. However, gold also made a new 5-year low, which suggests to me that there is danger ahead. This tells me that, more likely than not, gold will break lower before it rallies significantly."

"Commodities are all looking bad. Dollar is rising, which is the likely cause for many of them. Oil is continuing to correct and has yet to find its low. . ."

"No catalyst yet for gold, or for silver, or for most of the commodity complex. Physical buying does not trump COMEX, and Shanghai doesn't look particularly excited to buy at the moment. Right now is a seasonally weak period for gold, improving somewhat in August. Likely, new lows are ahead. I hate to be a Gloomy Gus, but that's what I see."

"You may well say to yourself, 'the Fed will never raise rates' - but my sense is, the market believes they will, and that belief pushes the dollar higher. And of course, dollar strength right now ends up pushing commodities (and PM) lower."

"Senior miners sold off quite hard this week, dropping to new lows and ending Friday with hints of a capitulation, dropping to new lows last seen in October 2008. Miners haven't quite broken that 2008 low, but it is not so very far away. . . . Gold isn't the most unloved asset class in the world - that status is reserved for the gold mining shares."

As of 20 July 2015:

"Wow, what a bad day for gold. It fell -35.60 [-3.14%] on massive volume, with most of the damage happening during the Asia trading session. . . . This wasn't about the buck, or about commodities. Those things shape the trend; today's move was about a trading gambit pure and simple - and it worked."

"At 09:29 China Standard Time a huge number of contracts was unloaded onto the market; one article I read suggests the assault happened on the Shanghai Gold Exchange first, and then COMEX responded. . . . Regardless, the short assault snapped gold instantly through support and drove it down to 1080 in one minute. It was a $50 loss, clearly an engineered move designed to run the stops below 1130. . . .Bottom line: not enough traders wanted to buy the dip."

"The RSI-7 for gold is now hovering around 8, which signals a strongly oversold market. . . . I believe the gold market is ripe for a rebound, but so far, that's only potential. We have to see the buyers appear first. . ."

"Miner losses were catastrophic today, . . . Superlatives fail me, I've not seen losses this big in the mining shares ever. Its total and complete capitulation in the miners, everything is being sold. Usually this happens at or near the lows, but before I buy, I want to see a reversal pattern show up. . . . Juniors made new lows too."

"If you ever wanted to know what "capitulation" means, . . . of traders panic selling out . . . - regardless of price. Sell. Sell! SELL!!!"

". . . On days like today, a reasonable question is, when should we buy? Is now the time? What process might we use to decide?"

"One process is just picking a day and saying 'boy, XXX sure looks cheap, I think I should buy now!' Yesterday could well have been such a day for the mining shares - lowest prices in ages, a great deal to be sure. . . that strategy seems...sub-optimal."

"Another process is waiting for a 'reversal pattern' to appear. The concept is, before buying, you wait for the market to show momentum has changed direction. i.e. you wait for the knife to stop falling before you try catching it."

"How does this work? One simple method waiting for a swing low: a two-day chart pattern where the closing price of today is higher than the high of yesterday. . . . Waiting for the swing low would have stopped you from buying . . . That seems pretty good. At the very least, it would have saved you from today's disaster."

". . . I hate to say its a sure thing, but under today's circumstances, a swing low is a very powerful signal. Without high volume, without other signs of capitulation, the swing lows are more iffy."

"I like to say, 'wait for the buyers to show up.' The chart evidence for buyers showing up is a swing low: a two-day chart pattern where the second day's close is higher than the first day's high."

"So I should have mentioned that, after a major move like we saw yesterday, retail buyers (like you and me) see the lower prices, and rush out to buy. This will cause a big spike up in the morning, as retail buys the dip."

'However, once that first hour is over, then we get to see where things really go. Is the big money loading up, or selling the rally? This morning, GDX was up over 5%, and that rally peaked out at 10:26 EST, right at the end of the first hour of trading. It has faded a bit since then."

"This is why we wait for the close. The last half-hour of trading is when the big money decides to either buy and take whatever-it-is home for the evening, or to sell. "

"Many times I have been tricked into buying during that first hour. Sometimes its the right thing to do, such as when you see a major break above resistance, but in today's circumstance, when the market hasn't yet proven it wants to reverse course, its a bit dangerous, as that first hour rally often fades and by end of day, perhaps even turns red."

'I believe the PM market will turn, and soon. We have a great buying opportunity in the very near future. Capitulation is exactly what we want to see to set up the low, and we definitely saw capitulation yesterday. But we need to wait for the market to show us that it is ready to reverse. That could be today, or tomorrow, or the next, but I believe it is not far away."

As of 30 July 2015

"If the dollar keeps rising, we'll test the 1072 lows soon enough, and I'm not sure they will hold."

"Commodities are trying hard to reverse. It's not clear if they'll manage that now, or if they need to fall to a lower level to find buyers. Some parts of the commodity complex have marked lows, but the strengthening dollar may short-circuit any commodity rally if it continues. How long will this dollar move last is anyone's guess - my sense is it was driven by increased optimism for a Fed rate hike following the FOMC meeting that ended Wednesday."

"All we can do is watch and wait." 

3. From CNBC

"Ultimately, Garner said the key level to watch for gold is the support around $1,125 to $1,120. If the price can break above $1,230, that could trigger to make the bulls happy all the way up to $1,305 or $1,400."

4. From Williams Lindsey

5. From Profit Confidential

6. From Zero Hedge

". . . 1080 happens to be the multi-decade channel limit above which it breached in 2009 and the 50% retracement of the uptrend from 1999 low to 2011 high."

"Although Gold is holding the channel median support, RSI depicts an increase in bearish momentum resulting in the break below the up sloping channel in force since 2 years."

"This suggests the down trend could extend further towards January 2008 highs of 1045/1030 but also, from an Elliott wave standpoint, the projected target for the 5th wave of the broad bearish cycle that started at 2011 highs."

"Short-term, in light of daily RSI which is sustaining a 1-year low (blue line) a rebound looks under way. However, it should be viewed as corrective so long the Head and Shoulder pattern persists i.e. 1130/1146 levels hold."

7. From King World News

"I’m not a day trader of gold; I’m a long-term holder. The bottom line is that I believe that the gold market has now seen the worst. Could it go just a bit lower? Yes. But compared to an upside potential of well over $2,000, the downside risk is low.”