PHLX Gold/Silver Sector (XAU)

[long-gone]

To:John Barendrecht who wrote (220)
From: strenlich Monday, Jul 7, 1997 1:18 PM
Respond to of 80032

John if demand outstrips supply by 44% how do Australian sales
and Swiss sales effect equation? Who is Buying? Regards-strenlich-.

To:strenlich who wrote (278)
From: John Barendrecht Monday, Jul 7, 1997 2:03 PM
Respond to of 80032

The central banks and speculators have always made up the short fall between supply and demand. Who is buying - Taiwan for jewelry and soon India, also for jewelry.

To:mikesloan who wrote (277)
From: John Barendrecht Monday, Jul 7, 1997 2:14 PM
Respond to of 80032

RSI, chart triangle signal breather for gold -Boll
BRUSSELS, July 7 (Reuter) - Gold's extremely oversold position on a 14-day Relative Strength Indicator and downside targets suggested by a February-June triangle indicate that the yellow metal's price slide could be stopped in the coming days, Belgian independent chartist Frank Boll said on Monday.

``Gold has fallen below an 11-year old support in the $325 to $340 area, that is extremely bearish. Those who have gold better sell it,'' he told Reuters. But a first downside target at $320 had been reached and the next move could be sideways to upwards.

He said the long-term trend remained negative.

At 1430 GMT gold was at $318 per ounce after falling to as low as $314, continuing a slide that started on June 27.

Boll said the February 12-June 26 triangle on the chart (XAU =) with a support base line at $340 and a falling hypotenuse with a $363 high on March 3 had indicated a first downside target at around $320 following the break of the support line on June 27.

This target is calculated by subtracting from the support line the same distance (about $20) as between the top of the formation at $363 and the support at $340. A break-out in the direction of the hypotenuse had a strong probability, he said.

Boll said that in a large triangle formation like that, prospective demand below the $340 area is gradually weeded out as the formation progresses, while supply increases in line with the falling hypotenuse.

He added that the possibility of a sideways to upwards correction to the fall since June 27 was supported by gold's extremely oversold position. The 14-day RSI on the daily chart now stands at 16.7, well outside the normal 30-70 band.

A previous low at 14 on January 6 was also followed by a sideways correction lasting several days.

But this does not mean that the long-term slide is over.

Boll said that on the weekly chart the 14-week RSI stood only at 26, compared to a low of 12 in the February sell-off, indicating that the downtrend could go further.

Looking at the long-term trend, Boll said the chart picture was very bearish.

A strong support line in the $330 area has been visited three times: in 1986, 1993 and 1997.

He said it made little sense to find a long-term downside target, but added that as long as gold did not significantly move back to above $340, the trend would remain downwards.

Geert De Clercq, Brussels Newsroom [phone], Fax [phone] (*** Note: for an RSI chart, go to Reuter Graphics, call up XAU=, click on ``Study'' in the toolbar, then ``RSI,'' then fill in 14, which is the most commonly used RSI parameter. For a weekly or monthly chart, click on ``W'' or ``M'' in the toolbar. To show toolbar, click on Tools, Toolbar)
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