An Investing.com analysis argues gold's pullback has reached a support area that may suit modest buying in gold miners and silver. It points to an oversold stochastic reading and a retracement level near $3800, while stressing that patience matters more than timing.
Gold has arrived at the support created by its previous $3941 area low, and an Investing.com analysis calls the zone a potential entry for gold stock and silver investors. The author describes it as not a big buy zone, but one.
Retracement points to $3800
The analysis notes that gold surged from about $2000 to $5600 without a meaningful consolidation. It says a 50% retracement of that move is common and would put gold at about $3800.
Stochastics (14,5,5 series) have moved into the oversold zone on the weekly chart, the author adds. The Fibonacci marker sits between $3941 and $3500, which the analysis calls a "must-buy" zone across $4000-$3500.
Miners and silver amplify gold's moves
According to the analysis, a 10% surge in gold often sees silver and gold stocks surge 20%-25%, and sometimes much more. The last buy zone in July-August saw GDX rally about 40% in a month.
The author expects a 20%+ surge in prices over the coming 1-2 months and suggests being only a modest buyer. On the GDXJ chart, the analysis says the current third leg typically involves significant investor demoralization.
Silver eyes a move under $50
For silver, the analysis sees a bull wedge in play. It says a Fed/PCE report driven move under the round number of $50 would almost certainly complete the phase in which amateur silver investors give up.
The author calls a 20% gain in a month or two realistic for silver. The exact trigger for gold's next big move, the analysis adds, will be a surprise.
Source: Investing.com
Trading involves risk.
Risk Disclaimer
