How to Play the New Gold Bull Market

Tuesday, Jun 25 2019 by
3

Gold looks ready to begin a sustained bull market in the foreseeable future.  I'm going to do a thread of blog posts applying Wyckoff analysis to pick optimal entry points in Gold ETFs and Gold Miners.  The objective of the series is to show analysis of price structures and expectations of future price action.  I'll conduct post-trade analysis as it'll be a helpful learning experiencing for myself and readers - it'll also add accountability.  

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GLD%233.pngGLD ETF WEEKLY CHART 2011 - 21 JUNE 2019

Let us begin with the above weekly chart, GLD ETF, that will be used as a proxy for Gold.

By contextualising what we see on the chart applying Wyckoff analysis we can start to build an investment thesis.  The price peaked in September 2011 and declined circa 38% to the SCLX low in June 2013.  From the SCLX low GLD had a swift price advance of nearly 20% in 2 months, this point is labelled as the AR.  The SCLX low and AR high are used as the outer boundaries for the trading range.

The chart shows GLD moving through the accumulation phases.  My current analysis is that GLD is now within Phase D of an accumulation trading range (TR).  My conviction is increased due to the events within Phase C.  Specifically, the LPS, which also performed a BU action to the down-sloping long term resistance line (pink line).  One can see the LPS area had a demand wick that touched the pink line on an increase in volume.  This shows that demand at this point increases to stop the downward movement.  The next 8 weeks the price remains below the SCLX low on below average volume.  The following price action that pushes the price back into the TR on increased volume shows that supply had diminished and was becoming exhausted.  The combination of the LPS action and BU action to the pink line followed by increasing volume and a price advance into the TR shows that demand was dominant.

Following the price advance on expanding spread and volume from Phase C to Phase D there was a small pullback in price of circa 6% on average and below average…

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Disclaimer:  

All information is for Educational purposes only. It is not to be taken as buy or sell decisions or financial advice.

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Kirkland Lake Gold Ltd, formerly Newmarket Gold Inc, is a Canada-based mid tier gold mining, development and exploration company. It has a diversified portfolio of assets located in the stable mining jurisdictions of Canada and Australia. The Company’s main gold mines are: the Macassa Mine located in northeastern Ontario and the Fosterville Gold Mine located in the State of Victoria, Australia. In addition, the Company owns the Holt Mine and the Taylor Mine, which are situated along the Porcupine-Destor Fault Zone, in northeastern Ontario, the Cosmo Gold Mine located in the Northern Territory, Australia and the Stawell Gold Mine located in the State of Victoria, Australia. The Company’s subsidiaries are: Crocodile Gold Inc and Franc-Or Resources Peru SA, among others. more »

NYQ Price
$47.4
Change
0.4%
Mkt Cap (£m)
7,929
P/E (fwd)
18.2
Yield (fwd)
0.4

Agnico Eagle Mines Ltd is a Canada-based gold producer with mining operations in northwestern Quebec, northern Mexico, northern Finland and Nunavut, as well as exploration activities in Canada, Europe, Latin America and the United States. It operates through the business units: Northern Business, which consists of its operations in Canada and Finland, such as the LaRonde mine, the Lapa mine, the Goldex mine, the Meadowbank mine, the Meliadine project and the Malartic Mine in Canada, as well as the Kittila mine in Finland; Southern Business, which consists of its operations in Mexico, such as the Pinos Altos mine that includes the Creston Mascota deposit and the La India mine owned by its indirect subsidiary, as well as Exploration Group, which focuses on the identification of new mineral reserves and mineral resources, and new development opportunities in gold producing regions. Its exploration activities are concentrated in Canada, Europe, Latin America and the United States. more »

NYQ Price
$57.7
Change
0.8%
Mkt Cap (£m)
10,885
P/E (fwd)
43.3
Yield (fwd)
0.8



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