Gold Unlikely to Recover This Year

Until recently I still had hope that this year would turn around for our gold stocks. But tax loss selling is now taking place. Unless gold somehow finally starts to explode higher before the end of the year, 2018 will be a down year for gold shares because with most equity investors enjoying big gains this year, they will be happy to realize losses in gold stocks to reduce their tax liabilities.

2017 was a happy year with Novo being such a big winner. This year, though, my own portfolio has suffered a loss 3 times that of my “Model Portfolio.” Novo’s massive decline this year has been a big part of that but is not the only reason. This week OncoSec got clobbered but I doubled down at half the price I paid on my original purchase, on the advice of my friend Chen Lin. You would have to subscribe to Chen to find out his thoughts on that, but suffice it to say Chen has staked a reputation as a biotech guru based on his amazing success in that field.

This week I commented on GMV Minerals, California Gold Mining, and Minaurum Gold. There was a lot more I wanted to write about, but the trip to Vancouver for the Metals Investor Forum that begins tomorrow has simply taken too much of my time.

Michael Oliver’s weekly chart as of Nov. 8 is displayed on your left. Regarding his daily chart (not shown here), he stated,We’d watch now for a turn back above the 3-day avg./zero line as the first sign of upturn from the downside of the past six days. Tomorrow that zero line is $1228.30 and it will drop to around $1226.60 Monday. A close tomorrow over $1228.30 would look like the beginning of a turn.

Next, take note that the two recent highs (down red arrows) are at the same relatively shallow level. Both were $14 over the zero line/3-day avg., but not $15. Trade to $15 over the falling 3-day avg. and those two peaks will be broken out above. That breaks the back of the recent three-wave decline. By Monday that will occur if the December future trades up to $1241.60 (and a somewhat lower level by Tuesday). Now let’s see how the daily momentum chart could feed into something larger if it turns up.

Now check out the chart on your left.  Michael wrote, “The 40-wk. avg. is similar in duration to the 3-qtr. moving avg. It’s one of our long-term metrics. In this situation the average itself (the zero line) is not structurally important. Prior lows wove below that average (i.e. below the zero line) by 2% and did so at several lows (horizontal on momentum). If gold closes out this week at $1257 or next week at $1254, then that will abort back above the violated momentum floor. A positive signal.

The first upturn signal from this momentum chart occurred when the two-month old parallel downtrend channel was closed above six weeks ago (price was then $1201.20). A weekly close credibly over the red horizontal is the next thumbs-up signal from this long-term chart. The final—and explosive—thumbs up is any crossing of the green trend line that goes back to mid- 2016. We will update on that level once the red line is overcome.