GOLD Weekly Chart; Hanging Man; Rising Wedge; Negative Divergence; Upper Band Violation with Tight Bands Squeezing-In; Gold Euphoria

The gold euphoria is in full swing. Why not? The world is ablaze in war with humans always loving to hate each other. Gold benefits from the uncertainty. US stocks collapse over a 3-day period ending in a low last Monday helping send gold higher. Interestingly, traders sought the perceived safety of gold during the last couple weeks of human turmoil while bitcoin was flat or lower. The US dollar weakens slightly over the same period also sending gold higher. No wonder the gold bulls are euphoric, snorting and partying like its 1999.

Gold prints a record high above the round, whole, psychological 2500 number. The weekly chart, however, says the Party's Over. The red rising wedge is a bearish pattern. The hanging man candlestick last week is glaring. This is a reversal candlestick. The longer the shadow the more street cred the hanging man has, like above. The hanging man also has credibility since volume this year is more robust than last year. Now you look for follow-through. Since it is a weekly chart, the next candlestick will need all next week to play out, but the expectation would be for a gap-down move for gold next week based on the hanging man. The hanging man verifies that the week started with the gold bulls in firm control, but alas, their control slipped-away, and the week played out with the bulls and bears battling for control.

The red lines show gold price making matching or higher highs, but the chart indicators are all sloping down; negative divergence. This means gold has topped-out on the weekly basis and a multi-week down move should begin. Neggie d wants to smack gold lower.

Price has tagged the upper standard deviation band at 2477 so the middle band, that is also the 20-wk MA, at 2369, is on the table, as well as the lower band at 2260. The purple arrows show the bands squeezing in tight which will create a big move in gold but the tight bands do not predict direction.

The blue circles show distribution taking place. This is the smart gold money taking profits and sloughing their gold off onto retail investors getting caught up in the yellow metal hype and global worry. Gold initially topped-out in May from the neggie d and overbot stochastics and money flow but the RSI and MACD were still long and strong so another higher high in price was expected and voila, it occurs. The smart money started unloading gold in May and followed through in July with all indicators now neggie d forecasting a top on the weekly basis.

The ADX is in nosebleed territory with no place to go but down. The ADX shows that the trend higher in gold for these many weeks is a strong trend higher since April. However, there is no more head space so even if gold eked out new higher highs, the ADX would be losing steam indicating that the strong trend in gold is waning. When the ADX drops out of the pink box, it will verify that the strong trend higher in gold is officially over.

The Aroon verifies the over-the-top euphoric bullishness for the yellow metal. Maybe it is because of the gold medals at the Olympics? Yes, the gold-plated cheap discs that are tarnishing before the athletes can step off the winner's podium. The Aroon green line shows that every gold bull believes gold will go up forever. Of course they do; that is why they are gold bugs. The Aroon red line at zero indicates that every single gold bear, bar none, every single one of them, have left town and all believe that gold will go up forever. What does that tell you when everyone is partying on one side of the gold boat? (contrary signal; the boat will tip)

Gold is extended above its moving average ribbon needing a mean reversion lower. The chart is sad and indicating that gold has topped-out on the weekly basis. Perhaps a gap-down move will occur next week. Do not be surprised if gold falls 200 or 300 dollars over the next couple weeks.

Of course, if central bankers goose markets, or maybe Putin dies, or the expected Iran attack on Israel is no biggie, or if the dollar falls lower, the gold hanging man may receive a temporary stay of execution. However, the chart is sick and any further loftiness in the precious metal should be faded.

Keystone does not hold any plays long or short in the gold arena currently. If you bring up the GLD ETF chart, it is exactly the same as the gold chart above. Thus, GLD is expected to drop on the weekly basis going forward. The gold and GLD daily charts are stumbling sideways not providing hints on direction. GLD has been dead money for over 4 months traveling sideways through 212-225. The 2-hour charts are also not providing clues on direction. A sideways symmetrical triangle may be forming on the GLD 2-hour chart with a fake-out move higher on 8/2/24, so a potential collapse from the triangle may occur within days (sideways triangles sometimes show a fake-out move with price, only for it to return inside the triangle, and then exit the pattern in the opposite direction; in this case the path forward would be a collapse and start of the gold down move on the weekly basis).

If you made a bunch of money in gold, now would be the time for profit-taking. If you call yourself a long-term investor (the old Wall Street joke is that we are all dead in the long-term), then you likely will need patience for the next several weeks as gold price likely retreats to the 2100-2200 area. Gold is at a ceiling. The Black Keys sing Gold On The Ceiling. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added Monday Evening, 8/12/24, at 7:00 PM EST: Gold bugs win the Monday trade as television screens show a cooling tower on fire at a nuclear plant in the middle of the Russia-Ukraine War. That is odd because there is nothing to burn on those hyperbolic cooling towers; they are steel and concrete with a big swimming pool at the bottom. The steam spent from the turbine floor is sent to the cooling tower that has double walls where the water vapor condenses back to water and drops down forming a big swimming pool of water at the bottom that can be reused in the plant. The smoke is thick and black which hints that oil is burning, or tires. An educated guess is that someone probably dumped a barrel of oil next to the tower, maybe with a few tires, and lit it along with other combustibles. The draft of the tower would suck the black smoke up through the tower and make it look like it is on fire. It is a large scale magic trick likely to instill fear. What else ya got, little Ruskie b*tch? Anyhoo, a gold orgy occurs as everyone waits for missiles to fire and bombs to drop on Israel. Oil is up for 5 days in a row with WTIC at 80 bucks and Brent at 82 with the Iran attack on Israel imminent, for the last 2 weeks. Gold will be interesting to watch this week. Gold displays a triple top on the 2-hour chart and hints that a top in this time frame will occur tomorrow, however, triple tops are supposed to not exist, so gold bugs are celebrating the triple top since price would be expected to move higher to nullify the top (about one-half of the triple-tops hold and one-half do not). Gold jumps over 30 bucks today and is up over 2500 now up to 2513. GLD says thank you kindly, like Burn to Shine by Ben and the boys, jumping +1.7% to 228.41. Traders are tripping over each other to buy GLD at the ask with both fists.

Note Added Saturday, 8/17/24: No pull back in gold last week. Instead, the dollar logs a fourth consecutive down week buoying gold. Interestingly, central bankers keep buying gold with both fists driving prices higher. The wars and pending Iran attack on Israel, now about 3 weeks in the making and yet to appear, create geopolitical angst that floats the yellow metal higher. Let's take a look at the charts. Nothing has changed in the gold weekly chart above. The thrust higher last week, however, hints at the need for a week or two of time before rolling over again. Central bankers and all buyers of gold are likely asking themselves the same question; do you buy at these all-time record prices chasing the price even higher? At that point, is it actually a hedge? The big push higher in gold and GLD comes on less volume than the prior week that was soft. The GLD daily chart shows the breakout on Friday to 232. Gold bulls are throwing confetti and Dancing in the Street. The chart indicators should top out this week in the daily time frame; simply watch for the negative divergence to form and you can call the top. Lots of charts are setting up for a big crescendo come Friday when Pope Powell speaks from Jackson Hole.