Gold appears to be holding a key support level that’s been dogging investors for months: $1,300 per ounce, which the gold price has touched multiple times already, only to dip back below it soon afterwards. Can we trust gold to hold this level and move forwards, or is this just another frustrating fake-out and shake-out?
We’ve been getting asked this question a lot lately, so Crush the Street sat down to discuss the current state of the gold market with Craig Hemke of TFMetalsReport.com, a site dedicated to helping investors and world citizens navigate the coming economic chaos and invest wisely in precious metals.
Craig Hemke began his career in financial services in 1990 but retired in 2008 to focus on family and entrepreneurial opportunities. Since 2010, he has been the editor and publisher of the TF Metals Report site, which has developed into a bustling community for precious metals enthusiasts.
A graduate of the University of Nebraska with a BS in Economics, Craig Hemke has been an active commodity option trader since 1987. Mr. Hemke provides accurate technical analysis and price forecasting in the metals markets for the short, intermediate and long terms. Most recently, he called the bottom in gold when other analysts were expecting lower prices.
Courtesy: Craig Hemke
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Since its inception, Mr. Hemke’s blog has expanded to a full online community with a passionate group of avid followers. Striving to provide some levity to the traditionally stodgy financial world, Craig Hemke’s wit and wisdom have earned him tremendous respect throughout the commodities trading community.
Crush the Street appealed to Mr. Hemke for some clarity in this challenging and often confusing gold market environment. Craig started by recapping what we’ve witnessed recently: gold has had a great run starting in November, from around $1,220 to almost $1,350 – a gain of around 10% in a short period of time.
The problem, according to Craig Hemke, is that gold versus the dollar had become extremely overbought, as measured by indicators such as the RSI (relative strength index). And so, gold was ripe for a pullback – and besides, the banks weren’t prepared to see gold break out above the $1,350 level.
The $1,350 to $1,360 level is extremely significant because when gold breaks above that level, historical charts show strong momentum to the upside after that. According to Craig Hemke, you’d have to go all the way back to April of 2014 to find the last weekly close in COMEX-traded gold above $1,360.
Courtesy: Craig Hemke
And so, according to Craig Hemke, if gold moves decisively above the $1,360 to $1,380 range, you’ll start to see headlines declaring that gold is breaking out. The forces that control these markets aren’t interested in seeing gold break out, so that’s why we’re seeing hesitation in the price of gold below that level.
At the end of the day, the price action we’re seeing in gold is all part of the process, according to Craig Hemke. Many investors have forgotten what a bull market looks like because it’s been so long since we’ve seen one in gold; in any case, while this latest push might not put gold above $1,360 this time around, but we will eventually and most likely it will happen this year, after which gold will be able to generate some real momentum to the upside.
It’s great to hear the perspective of a metals authority like Craig Hemke, so don’t miss out on his full interview with Crush the Street as well as his website and blog at TFMetalsReport.com, which is a must-visit site for all commodities traders and investors.
Crush the Street has a wide range of crucial reports for all investors which you can download immediately. These include our guide to wealth-building strategies in the gold and silver markets, our guide to capitalizing on the current extreme imbalance between gold and silver prices, as well as our report on how rising inflation will spark the next bull market in precious metals.
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