Elazar was launched in 2004 by Chaim Siegel and has served famous hedge fund clientele who demand a keen understanding of drivers of individual companies and financial markets. Chaim twice worked for renowned trader Steve Cohen of then-SAC Capital (now Point72). He was also a partner at JLF Asset Management which was funded by George Soros. Previously he was one of seven analysts on a $13B mutual fund at Morgan Stanley Asset Management. Elazar Advisors publishes its research into the Reuters/Refinitiv Institutional Platform and Factset where Elazar's earnings estimates are factored into the Street earnings numbers.  Elazar's research is used regularly by fundamental and algorithmic traders and investors at some of the largest mutual fund and hedge fund managers in the world. Chaim has been a 5-Star top ranked analyst in Tesla and other big cap tech companies. Try us with a  free trial here . All investments have many risks and can lose principal in the short and l

Gold ETF Showing Serious Technical Risk To Go Lower

gold bars
We said yesterday that we wanted to speak a little more deeply on gold.

We pointed out that, short term, we think gold has risk to the downside as we said a week ago.

Longer term though gold could be about to turn back into a downtrend.



gold chart
Gold ETF
This chart is going back through 2012. We show the Gold ETF because we like to use ETFs for quant modeling.

Gold just recently tested this longer term downtrend and appears to be rolling over (down).

This is a major building bearish technical problem for gold. If we break the 114 horizontal line we have a mini-confirmation that gold held that longer term downtrend without breaking above it. That is very bearish.

The next test would come at about 111 where we drew the bottom uptrend from January 2016. If we close below that level it could be lights-out!

Fundamentals Not Helping Gold

Inflation has been very slow in the US.  That now matches very slow inflation rates in the EU and Japan.

Slow inflation is negative for gold.
Source: St Louis Fed
Here you have an amazing chart showing that the CPI inflation measure and gold prices move together.

Now that global inflation is slowing, gold has risk.

And we're seeing it in the technicals.

Fundamentals Also Bearish

Add to that the US Fed is adamant about reducing their bond portfolio and raising rates.

Tight monetary policy by design stamps out inflation.  That adds more risk to inflation and more risk to gold.

Let's Wrap It Up

Fundamentals are damaging gold technicals potentially on a longer term basis.  114 and 111 will be key confirmation levels gold is breaking down. For now we think gold can get there.

By: Chaim Siegel, Elazar Advisors, LLC

Sign up for free email alerts.

Enter your email address:


Delivered by FeedBurner

Sign Up To Get Select Tech and Market Calls From Us, Free To Your Inbox

Contact Us

Name

Email *

Message *