Gold correction over ...

After a major correction, gold has lost it's shine and people have not been talking much about them recently. Most of the people were worried about the tapering, stocks and interest rates, this might be a good opportunity to relook at gold again.

In the recent Barron's Roundtable, gold and gold mining stocks were highlighted by few gurus, and in particular George Soros had added gold mining stock into his portfolio. One of which is Gold Miners ETF (GDX).

Let's take a look at the daily chart then follow by the weekly chart.

In the daily chart above, the last closing price is above the 200d MA, this is quite positive, and the 10d and 20d MA has also trended up. When will the 50d MA cross 200d MA, which is the technical divider between the Bull and Bear.

In the weekly chart above, the closing price is above the weekly 20 MA, and 10 MA has trend up as well.

So who's been buying for the past few weeks, when not many people are looking and can this upward trend continue?

When should you cut loss

When market is on the uptrend, everyone is happy. But no stock market goes up forever, at some point it will correct, whether big or small ones. When the trend turns the other way, most of us will struggle emotionally on whether should we take profit off the table or to cut loss for the losing trades. This is why Mr Market is so interesting and everyday, every events bring different end results to Mr Market due to human emotions.

Take for e.g., this trade which I had made during October 2012(the first red arrow on left). At that time, I bought ishares silver(SLV) at about USD33. Also note that the 50MA has crossed above 200MA, so trend should have been reversed to uptrend. 

However, in Feb 2013, this had changed with 50MA below 200MA. At that point, instead of selling when TA told me to, I was holding onto hope that silver will ride up again. But it never did, and I finally cut loss at about USD27(the 2nd red arrow), sometime in April this year. 

Looking back, if I had not cut, I would have lost more(on paper), cause silver actually hit a low of USD18. And because I had cut loss in April, only then I had the capital to buy again recently. 

Related post: silver trend reverse

Silver trend reverse?

Since my last post on Silver, from TA, it seems that the downward trend of Silver has slowed and it has started to reverse up. Although it has crossed the 50MA, it is still below the 200MA. As such, for medium term, the trend should be forming upwards. For long term investor, is it a good time to start buying some?

A few friends asked me given a choice and limited funds, which one to invest, Silver or Gold. Well, though Gold is also reversing the downward trend as well, I am not comfortable investing in it now since both George Soros and John Paulson had sold off most of their gold holdings. We are just small fry, we should always follow the big SHARK right :)

Related post: Time to buy gold and silver?

Time to buy Gold and Silver again?

By now you should have read that both gold and silver are in and still in the bear territory, since 50MA is still below 200MA. However, since July, we have seen both trending upwards. Is it a buy signal?

Looking at gold TA, there are still a number of resistances;
1. First gap down(first oval), though this has been filled by the last few days
2. 2nd gap down, which it still has some way to go
3. And it is still way below the 200MA

Above observations applies to silver as well.

At the newsfront, based on an article by Bloomberg, one of the most bullish investor in gold had cut stake by half.
http://www.bloomberg.com/news/2013-08-14/paulson-cuts-spdr-gold-stake-53-as-soros-sells-out.html

SPDR Gold

Ishares Silver