Black Friday Sale on Gold

• Posted by Greg Harmon
• on November 27th, 2015

The picture above is the typical image of what happens in the wee hours of the morning on Black Friday, the Friday after Thanksgiving for those of you reading from under a rock. Retailers offer stagger deals and shoppers prep all year to box out each other to grab the last TV on the floor. Before the store restocks. And instead of just clicking twice on line to get the same. This is the best argument against humans being rational beings.

Many will tell you that it is fun to get up at 3 in the morning to become part of a mad pushing crowd. Trying to break down the door of the store they did not want to enter just 2 days before. Well, ummm, ok. I will leave that to others. Apparently one store that does not have buyers breaking down the door to get some is the Gold store.

The chart above shows the trajectory for Gold prices since they stated higher in 2001. There is the peak in 2011 with a perfect Tweezers Top and the initial rapid decent that began in 2013. Since mid 2013 the price has been more subdued, falling in a steady channel for over 2 years. Clearly the price action points lower.

What makes it interesting today is that with two days left in November the price is making an intraday move to new 5 and a half year lows. It is also outside of that falling channel to the downside. Gold can still recover and finish the month back in the channel and then rebound in December, keeping the steady pace path in tact. But a close under 1045 could spell an acceleration lower for Gold prices. In that case the prior consolidation and 61.8% retracement area around 900 seems a lock.

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