Gold Ready for a Pause

08/15/2019 6:00 am EST

Focus: COMMODITIES

John Rawlins

President and CEO, QuantLogik LLC

With gold hitting multi-year highs and in overbought territory, it appears ready to retrace some of its recent gains, according to John Rawlins’ QuantCycles Oscillator.

Gold has rallied sharply since the middle of May, breaking through a long-term trading range to make multi-year highs.

The recent strength in gold has pushed it near overbought territory. The long-term QuantCycles Oscillators expected gold to top on July 26 (see chart). The recent strength due to numerous flight to safe-haven risk factors, has pushed gold even higher.

gold w

As you can see, the oscillator expects gold to correct over the next nine weeks before turning higher again.

The daily charts also shows gold approaching major overbought territory (see chart) amid a bearish near-term trendline.

gold d

Digging to the shorter-term, gold has pushed through major overbought territory (see chart).

While the four-hour chart does have quite the bearish outlook, when examining all charts, it is definitely a sell.

gold

Looking closely, the QuantCycles is not predicting an end to the bull market in gold but a correction is due. It recently rallied through the key psychological $1,500 level and made six-year highs.

This bull market is definitely ready for a breather. 

John Rawlins described the value of the QuantCycles Oscillator recently at The Orlando MoneyShow.

The QuantCycles indicator is a technical tool that employs proprietary statistical techniques and complex algorithms to filter multiple cycles from historical data, combines them to obtain cyclical information from price data and then gives a graphical representation of their predictive behavior (center line forecast). Other proprietary frequency techniques are then employed to obtain the cycles embedded in the prices. The upper and lower bands of the oscillator represent a two-standard deviation move from the predictive price band and are indicative of extreme overbought/oversold conditions.

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