a prediction on gold

  1. 12,912 Posts.
    lightbulb Created with Sketch. 69
    Mr. Russell,

    I was fooling around with some numbers this weekend and I came up with
    something I think is quite interesting and relates to what you have written
    about regarding how a market behaves when it approaches it's 50% retracement
    level of a previous move.
    Specifically, I am talking about the XAU now (I have seen your discussions
    viz a viz gold and the 50% retracement level of the 20 year decline.)
    I applied the same principle to the XAU decline from the February 1996 peak
    of 155.60 to the October 2000 low of 41.61.
    That decline was 113.99 points.
    The current three year rally from the October 2000 low just reached its'
    highest peak on Sept 25, 2003 at a reading of 98.49.
    If you take half ot the 113.99 point decline you get a number of 56.995.
    If you add 56.995 to the previously mentioned October 2000 of 41.61 you get
    a reading of 98.60.
    That means at when we hit 98.49 last week we hit the 50% retracement level
    of the 1996 - 2000 decline.
    Therefore, it would be reasonable to expect the XAU to retrace from this
    level. It is also not surprising, given the above, that the sell-off last
    week was so violent.
    I believe it will take until late in the fourth quarter to retrace, re-group
    and push above $400 on gold and 100 on the XAU.

    Hope this is of interest to you.

    Keep up the great work,

    Best Regards,
    Kevin Teamkin- a longtime and loyal subscriber

    Russell Comment -- Thank you; I think this is a logical and probably very valid analysis.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.