Midweek Market Update

Market updateDear PGM Capital Blog readers,

In this midweek’s blog edition, we want to highlight some of the most important events for the week of August 11 and August 15, 2014.

  • PGM Publication
  • Must see internet links
  • Technical market outlook

PGM Publication

On Tuesday, August 5th a bundle containing the first 75 articles our chairman, wrote for “Times of Suriname”, in the period March 2013 up to July 22nd 2014 was presented to the public in Paramaribo, Suriname.

Times PGM Capital Bundle

Times of Suriname – PGM Capital Bundle

Download Link Times PGM Capital Bundle

Must see internet links

Please take your time to read/watch the following links that we have posted below.

Technical market outlook

In this weeks technical outlook we want to take a more short-term outlook on Gold for which we still support our mid to long-term technical outlook that we have presented in our midweek market update two weeks ago.

In the past couple of days we are witnessing a nice technical pattern in the precious metals complex which we want to share with you.

In our long-term outlook we showed the possibility of a strong bull-market to start in the near future (next 2-3 weeks). For this to happen we need to see some technical action to support this move and for gold to lift off. At the moment we see gold trading in a narrow sideways channel in a range of 1300 – 1322, which also represents support and resistance and either one of these levels needs to be broken to see which direction we are heading, but a trend is already emerging if we take a look at the short-term 1-hour Gold chart.

Gold Hourly Chart

Gold Hourly Chart (Click to zoom)

Here we can clearly see that narrow sideways channel, that we have seen for a couple of days and it nicely respected the support trend line and there is high chance that we might see Gold price challenge the support trend line in the short-term before we see higher prices.

The notion for high prices is supported due to the fact the we have a rising neck-line and is seen in the chart represented by higher lows. This normally is a positive sign for higher prices to come (=more buyers then sellers in the market). For that we expect to see prices try to reach 1302-1308 on the downside and challenge the support level, which represents a great low-risk buying zone for short-term traders. If gold-prices fall below 1300 then we might see lower prices first and because of that a short-term trader will place a stop at 1300 to limit further losses.

Right now any further price increase for Gold is on hold due to a lack of price action for Silver and the Gold Miners. Since these assets are heavily connected, it is important that either one of them (Silver or Gold Miners) needs to take a lead and break some important resistance levels to clear a path for Gold itself.

First we take a look at Silver on the 4 hour chart.

Silver 4 Hour

Silver 4 Hour Chart (Click to zoom)

It is clearly visible that Silver (opposite to Gold) is trading in a bearish channel and it needs to break-out of this channel for us to see any higher prices in both Silver and Gold. This is the first reason we didn’t see higher prices for Gold yet.

The second reason can be found with the Gold Miners which is represented by the ETF with symbol GDX. Lets take a closer look at the longer term Daily GDX chart.

GDX Daily

GDX Daily Chart (Click to zoom)

While the Gold Miners are showing strength since June 2014, GDX upper momentum has been capped by the longer term upper resistance trend line and we need to see this trend to be broken and GDX move higher, to support higher Gold prices.

These correlations show, while Gold wants to move higher it cannot do it alone and needs to do it in tandem with the Gold Miners and Silver. We conclude that, if Gold wants to move higher, we need to then see a break out of the Gold Miners and/or Silver to clear a technical path for higher prices.

The next short-term resistance for Gold will be at 1323 followed by 1345.

We will keep you up-to-date on the future technical developments.

Last but not least, before following any investing advice, be aware that above outlook is of pure technical nature and does not respect any global macro events that will disturb this outlook. Please always consider your investment horizon and risk tolerance and financial situation.

Yours sincerely,

Michael Panneflek

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