Gold Price Going to the Mat?

The gold price has taken a beating lately. Is it going down for the count?

Bullion.Directory precious metals analysis 6 November, 2014
By Terry Kinder
Investor, Technical Analyst

Gold has taken more punches than Randall “Tex” Cobb in a boxing match.

Does the gold price have a rock solid chin like Randall “Tex” Cobb or a glass jaw? Image: pixabay

Like old “Tex”, the gold price can take a solid punch, but how many more blows can it take on the chin before it hits the mat, falling to $1,000.00 per ounce or lower?

It would be somewhere near this point in the gold price battering that Howard Cosell would quit discussing the boxing match in disgust. All of which is a long way to ask, is it time to throw in the towel on gold or will it  come roaring back?

There are some smart people who think gold will go down to or below $1,000.00. Jordan Roy-Byrne over at The Daily Gold has delivered some pretty solid forecasting jabs recently, including predicting that the HUI Gold BUGS Index would fall to 150, which it actually fell below that level today. Jordan Roy-Byrne believes gold could fall and find support at $1,000 with areas of support at $1,080.00, $1,040.00 and $1,000.00.

This is similar to the levels of support I see which are:

• $1,076.99
• $1,044.42
• $1,012.36
• $980.79

Those numbers are based on the recent pivot high gold price of $1,392.60.

Another technical pugilist is Peter Brandt. He has not pulled his punches with the gold bugs and has been very critical of their inability or unwillingness to see the downward trajectory of the gold price.  His latest display of sweet chart science projects that the gold price could fall to $970.00.

Is the punch drunk gold price going down for the count or will it get up to fight another round?

The gold price started to look wobbly once it was hammered with a series of blows that knocked it down below support around the $1,180.00 level. From there it has been pummeled further, all the way down to $1,137.20. This has rocked the gold price back within the descending Andrews’ Pitchfork. Combining the pitchfork and our gold price support level of $980.79 we have placed Fibonacci Retracement levels on the chart. Of special interest are the levels at $1,138.10 (0.618 Fib) and $1,078.00 (0.764 Fib).

The $1,078.00 level appears especially important. Should the gold price not be able to withstand a flurry of punches here, then it is highly probable that it will make a trip down to the mat around the $980.00 level. Around $980.00 awaits the median line of the Andrews’ Pitchfork. Alan Andrews believed that price would gravitate towards the median line about 80% of the time.

All of which brings us back to the original question of our pugilistic prognastication, is the gold price headed down for a sub-$1,000 count? Much will depend if our plucky prizefighter can keep his wobbly legs at the $1,078.00 level.

We’ll know soon if the gold price has a chin like Randall “Tex” Cobb or a glass jaw.

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