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Category Archives: XAU
XAU Index Review
On May 4, 2022, we said the following:
XAU Index Price Momentum
Below is a chart of Philadelphia Gold And Silver Stock Index from January 1985 to May 4, 2022, reflecting Price Momentum data.
Edson Gould’s XAU Upside Resistance Targets
Below are the Upside Resistance Targets for the Philadelphia Gold & Silver Stock Index (XAU) as of September 10, 2021: Continue reading
1985-2021: XAU Velocity Indicator
Below is the Velocity Indicator for the Philadelphia Gold and Silver Stock Index (XAU).
Posted in Velocity Indicator, XAU
Gold Market Review: March 2020
In our last Gold Stock Indicator, published October 28, 2018, we offered up $1,755.41 as the extreme upside resistance level for gold. When the same level is drawn to the most recent price, we find that gold has struggled at the $1,755.41 resistance line.
It is one thing to struggle but it is an entirely different situation to collapse below the last remaining upside resistance level. Ordinarily, the price action above the descending $1,755.41 line would have assured us of a rise to the previous peak. Now, with the latest collapse, the price of gold is slated to bounce at the descending $1,615.82 level. That descending line is the equivalent of the $1,343.75 price.
Looking at the Philadelphia Gold and Silver Mining Stock Index (XAU) leads us believe that the $1,343.75 level in gold, although a very extreme level on the downside, could be a realistic target.
Notice that the XAU index could not exceed the upside resistance target of 166.09 AND the prior peak set in August 2016. That is a significant hurdle that should have been breached on the upside. Instead, the failure puts emphasis on the downside target.
The XAU index stands to re-test the 133.80 level which is the equivalent of 52.00. It should be noted that the XAU is the leading indicator for the direction that the price of gold should go. If you didn’t notice the rise in gold stocks from the late-2015 low then you shouldn’t notice it now.
The latest upside action of double digit percentage increases is a warning of more downside risk rather than a resurgence to the 2010 peak at 228.76 (our April 2011 call that the XAU would decline -66% [it lost -83%] found here).
Gold Stocks: Hedge Free
We have been quoted here on many occasions saying that when the general equity market takes a dive of –10% or more, so too does gold stocks by a greater margin. Our point, gold stocks are not a hedge from general market drops.
In our September 24, 2014 article titled “Gold Stocks: Risks and Remedies” we highlighted the numerous instances from 1939 to 2011 of when the Dow declined by more than -10% and showed how either the Barron’s Gold Mining Index or the Philadelphia Gold & Silver Stock Index declined by a greater percentage.
In the recent decline of the DJIA from January 26, 2018 to February 8, 2018, the index declined –10.36%. So how much did the Philadelphia Gold & Silver Stock Index (XAU) decline? The XAU declined –11.57%.
In the chart above, we have excluded the decline of –14.75% from January 24, 2018 to February 9, 2018 in the XAU index. Add this to the growing list of instances of when the DJIA declines more than –10% and gold stocks also decline by a greater percentage.
Posted in DJIA, gold, gold bugs, Gold Stock Indicator, XAU
The Power and Lessons of Speed Resistance Lines
We are not big fans of charting as a means to make decisions about where the price of a stock or index will go. However, when a charting strategy has a high level of consistency while taking away our own person bias, we have to dig a little deeper. This is a general overview of the incredible forecasting power and the practical investment lessons that we’ve experienced while employing Speed Resistance Lines.
Speed Resistance Lines, as demonstrated by the writing of Edson Gould, have been of significant aid in tempering our enthusiasm for a stock or index, especially when applied to targeting downside levels. Within the context of the current bull market since 2009, we’ve seen a large majority of the stocks achieve the conservative downside target (more SRLs we’ve run here). This means that even when we thought we selected the right stocks to apply to the SRL, we have been wrong.
Below are the earliest three examples of Speed Resistance Lines (SRL) that we introduced with the focus on downside targets. The first SRL we will review is the Dow Jones Industrial Average from 1949 to 1975. The second SRL is for the Philadelphia Gold and Silver Stock Index (XAU) from 1998 to 2016. The last one is Netflix (NFLX) from 2007 to 2013.
sources:
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Scheinman, William X. “1966 and All That: One Stock Market Analyst Sees Some Ominous Parallels Today”. Barron's. March 17, 1969. pg. 5.
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Scheinman, William X. “600 on the Dow?” Barron's. February 9, 1970. pg. 5.
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Scheinman, William X. “May to December: The Bear Market, Says One Analyst, Will Hit Bottom This Winter”. Barron's. August 24, 1970. pg. 5.
Posted in NFLX, William X. Scheinman, XAU
Gold Stock Indicator: November 4, 2014
Since our October 17, 2014 posting, the price of the SPDR Gold Shares (GLD) has declined –5.69% while the Philadelphia Gold and Silver Stock Index (XAU) has declined –16.52%.
Posted in Barron's Gold Mining Index, gold, gold bugs, Gold Stock Indicator, XAU
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Gold Stock Indicator: September 19, 2014
Gold as represented by the SPDR Gold shares (GLD) and gold stocks as represented by the Philadelphia Gold and Silver Stock Index (XAU) have declined –1.48% and –5.42%, respectively.
Gold and gold stocks are getting decimated in the latest decline. Our Gold Stock Indicator (GSI) is getting very interesting. Below are the GSI for the Philadelphia Gold and Silver Index (XAU) compared to the Barron’s Gold Mining Index (BGMI).
Posted in Barron's Gold Mining Index, BGMI, gold, gold bugs, Gold Stock Indicator, XAU
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Gold Stock Indicator: August 8, 2014
Gold and precious metal stocks continue their long road to nowhere with a minor increase of +1.32% in the SPDR Gold Share (GLD) during the last week.
Gold Stock Indicator: June 20, 2014
Gold and gold stock continued to climb higher in the last week. The gold ETF (GLD) rose +2.90% in the last five days while the gold stock index (XAU) rose +6%.
The Gold Stock Indicator for the same period shows the critical levels that need to be exceeded on the upside.
Posted in Barron's Gold Mining Index, gold, gold bugs, Gold Stock Indicator, XAU
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Review: XAU Speed Resistance Lines
In our very first attempt at understanding Edson Gould’s Speed Resistance Lines, when the Philadelphia Gold and Silver Stock Index (XAU) was within 6 trading days of the top (found here), we said the following:
“Based on the most recent high of 228.95 the downside target for the XAU index is 76.32. We recommend that whenever the XAU index falls at or below the speed resistance line drawn on the chart, between now and just before 2028, as part of the secular rising trend in interest rates/inflation, we would expect that the stocks in the index are underpriced. Confirmation of fair values should be determined for possible speculative positions at these times.”
An updated chart of the Philadelphia Gold and Silver Stock Index with Speed Resistance Lines is below:
Posted in Edson Gould, speed resistance line, SRL, William X. Scheinman, XAU
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