August Comex gold (GC Q3) futures prices on Wednesday plummeted to a nearly three-year low as the market has seen weak-handed long liquidation and technical short-selling. As the second quarter winds down, Comex gold futures prices are set to see their poorest quarterly performance ever recorded, on a percentage basis.
Several factors are working against the gold market and the raw commodity sector, in general. A strong batch of U.S. economic data on Tuesday further bolstered notions the Fed will begin to wean the U.S. economy from its easy-money policies, which for several years have been a bullish underlying factor for the raw commodity sector, including the precious metals. Last week’s hawkish Federal Reserve FOMC meeting is still reverberating in the market place.
The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears’ next near-term downside breakout price objective is closing prices below solid technical support at $1,200.00.
The gold market is an important “outside market” that can impact other markets on a daily basis. My friend and respected industry professional Louis Mendelsohn has been studying “Intermarket analysis” for decades.
From an important Intermarket analysis perspective provided by VantagePoint Intermarket Analysis software (www.TraderTech.com), it appears there will be more downside price action in August gold futures in the near term.
VantagePoint is a valuable trading tool for which a trader can glean clues on potential near-term price trend changes or continuation of present trends. These near-term clues provided by VantagePoint can and do give a trader a key edge.
See on the VantagePoint daily bar chart August gold futures that the Predicted Medium Term Crossover study shows the blue predicted 4-day exponential moving average is below the actual black 10-day simple moving average close, and both lines are trending lower, which is a near-term bearish signal.
The Predicted Medium Term Crossover is the predicted 4-day exponential moving average of typical prices four days ahead (P4EMA+2) crosses above or below the actual 10-day simple moving average close (A10SMA).
Also see at the bottom of the daily chart for August gold futures that VantagePoint’s Predicted Neural Index (PIndex) is also in a bearish mode, with a reading of 0.00. The PIndex is a proprietary indicator that predicts whether or not a three-day simple moving average of the typical price will be higher or lower two days in the future than it is today. The Predicted Neural Index compares two three-day moving averages to one another – today’s actual three-day moving average with a predicted three-day moving average.
When the predicted simple three-day moving average value of typical prices is greater than today’s actual three-day moving average value, the Predicted Neural Index is “1.00,” indicating that the market is expected to move higher over the next two days. When the predicted simple three-day moving average value of typical prices is less than today’s actual three-day moving average value, the Predicted Neural Index is “0.00,” indicating the market is expected to move lower over the next two days.
The Predicted Neural Index is either correct or incorrect so its performance can be measured in terms of percent correct to produce the accuracy statistics cited for VantagePoint, which has a predictive accuracy rate of around 85% across a wide range of markets and time spans in ongoing research.
