Why There Is Still Hope For Gold Bulls
San Francisco (Oct 2) Gold is approaching a critical price point, i.e. $1,180. That is the lowest price of the last years. It has been tested twice, so this third retest is a crucial one for the short and medium term.
Although the sentiment is extremely negative, there are some indications which could provide some help for the yellow metal.
The first set of charts shows the precious metals complex: gold, silver, gold miners and the bullish percentage index of gold miners (BPGDM). The key insight from this set of charts is that silver has broken below the lows of December 31st 2013 gold and the miners are holding up much better, in particular junior miners. Also, the BPGDM is nowhere near the same extreme levels as December 2013. It should be noted that the miners have been hit hard a week ago, not a sign of strength.