GOLDBUGS AMEX Goldbugs Index (GOLD)

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US - PHLX Gold/Silver Index (XAU) - Reaction Low »» Weekly Summary Analysis
By: Marty Armstrong | July 24, 2021

The Gold & Silver Cash Index closing today at 13564 is immediately trading down about 5.92% for the year from last year's settlement of 14419. As of now, this market has been rising for 3 months going into July reflecting that this has been only still a bullish reactionary trend. As we stand right now, this market has made a new low breaking beneath the previous month's low reaching thus far 13283 while it's even trading beneath last month's low of 13801.


ECONOMIC CONFIDENCE MODEL CORRELATION

Here in Gold & Silver Cash Index, we do find that this particular market has correlated with our Economic Confidence Model in the past. Our next ECM target remains Mon. Mar. 14, 2022. The Last turning point on the ECM cycle low to line up with this market was 2020 and 2000. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2010 and 1996.


MARKET OVERVIEW
NEAR-TERM OUTLOOK

The Gold & Silver Cash Index has continued to make new historical highs over the course of the rally from 2020 moving into 2021. Prominently, we have elected two Bullish Reversals to date. Currently, the market has dropped back and is trading beneath the previous year's close warning of a potential correction in play.

This market remains in a positive position on the weekly to yearly levels of our indicating models.

Solely focusing on only the indicating ranges on the Daily level in the Gold & Silver Cash Index, this market remains moderately bearish position at this time with the overhead resistance beginning at 13610 and support forming below at 13283. The market is trading closer to the resistance level at this time.

On the weekly level, the last important high was established the week of May 31st at 16709, which was up 13 weeks from the low made back during the week of March 1st. We have been generally trading down for the past 7 weeks, which has been a very dramatic move of 20.50%.

Immediately, this decline from the last high established the week of May 31st has been important closing sharply lower as well. Before, this recent rally exceeded the previous high of 15177 made back during the week of April 19th. That high was likewise part of a bullish trend making higher highs over the week of March 15th. This immediate decline has thus far held the previous low formed at 12808 made the week of March 1st. Only a break of that low would signal a technical reversal of fortune and of course we must watch the Bearish Reversals. Right now, the market is below momentum on our weekly models casting a bearish cloud over the price action. Looking at this from a wider perspective, this market has been trading up for the past 4 weeks overall.

INTERMEDIATE-TERM OUTLOOK

YEARLY MOMENTUM MODEL INDICATOR

Our Momentum Models are rising at this time with the previous low made 2018 while the last high formed on 2020.


A closing above last year's high of 16536 will warn of perhaps new highs into next year. A closing below that number would warn that this year could be just a temporary high.

Interestingly, the Gold & Silver Cash Index has been in a bullish phase for the past 3 months since the low established back in March.

Critical support still underlies this market at 13400 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Nevertheless, the market is trading below last month's low warning of weakness at this time.

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