Gold And Miners Secular Uptrend Pulled Back To Long-Term Support

By Bryan from pitchforkplayground.com:

In an uptrend resistance becomes support. The precious metals are in a secular (15 to 20+ years) uptrend and they are currently pulling back to long-term support levels.

That’s my story and I’m sticking to it!

Let’s start with Gold itself. Due to its volatility the support level in COMEX Gold is actually a zone as opposed to a cleanly defined line. Notice how price ran into resistance between $1055 and $1110 back in 2008 / 2009 and then turned that level into support in late-2009 / early-2010. Now, in 2015, Gold has pulled back almost to the support zone with a low so far of $1132.

Some analysts are calling for a low of $1030 before the current cyclical bear trend is completely finished. While none of us want to see a price of $1030 on the yellow metal, notice that $1030 would just be a test of the long-term support zone.

gold_monthly_2001_2015

 

The Gold Bugs Index found resistance at the 150 round-number back in 2002 and 2003. In 2004 and 2005 that level (actually 163 & 165) was tested for support and the test was successful with price tripling over the next three years. After this massive upleg we got a nearly vertical drop back down to the support level in 2008 where, once again, price proved that the old resistance level had turned into support.

Rising off support in 2008, price gained over 400% before peaking in 2011 and beginning the cyclical bear market that we have been enduring for over three years now. Notice that price is back at the long-term support level and the support level has been tested successfully yet again.

HUI_monthl_1997_2015

 

 

There is more in-depth chart analysis, in particular for several miners: Goldcorp, Kinross Gold, Pan American Silver, Paramount Gold and Silver.

Receive these articles per e-mail

Subscribe for the free weekly newsletter and receive 3 papers about physical precious metals investing