A Gold Bounce Might Finally Be Shaping Up

Technical analyst Jack Chan charts the latest moves in the gold and silver markets, which includes evidence of a counter-trend bounce forming.

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Our proprietary cycle indicator is up.

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The gold sector is on a long-term buy signal, according to analysis of the Gold Bugs Index. Long-term signals can last for months and years and are more suitable for investors holding for long term.

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The gold sector is also on a short-term buy signal. Short-term signals can last for days and weeks, and are more suitable for traders that are nimble enough to get in and out of positions quickly.

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Speculation has now dropped below level of previous bottom, which is another sign that a bottom in gold prices is forming.

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The trend for gold miners, as measured by the Market Vectors Gold Miners ETF (NYSE:GDX), remains down. The selling in these stocks has been relentless since late summer.

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A top in the Gold Bugs Index has been confirmed, and until resistance is broken, the trend is down.

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Silver is on a long-term buy signal.

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The iShares Silver Trust ETF (NYSE:SLV) is on a short-term buy signal. Short-term signals can last for days to weeks, and aremore suitable for traders.

Summary
The gold sector is on major buy signal. The cycle is now up, but the trend remains down. A counter-trend bounce is in progress. Caution is advised.

This article is brought to you courtesy of The Gold Report.