🏓Price of gold is like watching a ping-pong show - here's why🏓
In my last gold update I said the price of gold will depend on what happens in the economy.
Let’s zoom out a little in this chart to see what’s happened since February this year.
In March, gold like everything else in the world sold off in a mad dash for cash.
After the dust settled many turned to gold in risk-off sentiment.
Gold then moved another leg higher after the FED, ECB, BOE, BOJ and many other central banks started QE infinity.
Since then gold has been consolidating between $1,775~ which is resistance and $1,685~ which is support.
On Friday the job number surprised the markets and gold sold off sharply as investors went risk-off. Gold finished the week under support.
Does this mean $1,685 which was support is now resistance and gold is heading $1550 next?
The market needs to prove that to us in the coming weeks.
Just because gold or any other asset breaks a support level does now mean that it's breaking lower, or support is now resistance.
Prices can linger at these levels for days or weeks, and these places are great for bear/bull traps. We can only wait for price to tell us the answer.
What is likely to happen next? That will depend on market news, the likelihood of gold moving lower is more market sentiment that there will be a v-shape recovery.
RSI shows gold has a lack of buying/selling momentum and is doing nothing, but the Ichimoku could (a technical analysis that shows support and resistance) shows that we are still in bull territory.
Gold like all assets move because of what is happening in the markets, not because of what is happening in charts. Charts just show us the history, not the future. By being able to read the past and understanding the gold market, we can make guesses on where it’s moving forward.
Here are all things that I can see happening:
1. Gold ranges between the $1,775-$1,550 as the world re-opens as the world puts on their S&P 40k hats and keep buying shares
2. If there is a v-shape recovery gold price can go below $1,550
3. Gold is in short-term down-trend before carrying on the rally to reach all new time highs if there is no v-shape recovery (this can take years to play out)
If you look at my last graph on gold, all monthly indicators show that gold is in a big bull market, so I’m leaning towards 1 and 3 to be true, and 2 less true, although still probably. I also talked about the bull and bear cases for gold. Feel free to give it a read and if you enjoy how I break down markets, be sure to give me a follow as I post like this for all major markets.
Let’s zoom out a little in this chart to see what’s happened since February this year.
In March, gold like everything else in the world sold off in a mad dash for cash.
After the dust settled many turned to gold in risk-off sentiment.
Gold then moved another leg higher after the FED, ECB, BOE, BOJ and many other central banks started QE infinity.
Since then gold has been consolidating between $1,775~ which is resistance and $1,685~ which is support.
On Friday the job number surprised the markets and gold sold off sharply as investors went risk-off. Gold finished the week under support.
Does this mean $1,685 which was support is now resistance and gold is heading $1550 next?
The market needs to prove that to us in the coming weeks.
Just because gold or any other asset breaks a support level does now mean that it's breaking lower, or support is now resistance.
Prices can linger at these levels for days or weeks, and these places are great for bear/bull traps. We can only wait for price to tell us the answer.
What is likely to happen next? That will depend on market news, the likelihood of gold moving lower is more market sentiment that there will be a v-shape recovery.
RSI shows gold has a lack of buying/selling momentum and is doing nothing, but the Ichimoku could (a technical analysis that shows support and resistance) shows that we are still in bull territory.
Gold like all assets move because of what is happening in the markets, not because of what is happening in charts. Charts just show us the history, not the future. By being able to read the past and understanding the gold market, we can make guesses on where it’s moving forward.
Here are all things that I can see happening:
1. Gold ranges between the $1,775-$1,550 as the world re-opens as the world puts on their S&P 40k hats and keep buying shares
2. If there is a v-shape recovery gold price can go below $1,550
3. Gold is in short-term down-trend before carrying on the rally to reach all new time highs if there is no v-shape recovery (this can take years to play out)
If you look at my last graph on gold, all monthly indicators show that gold is in a big bull market, so I’m leaning towards 1 and 3 to be true, and 2 less true, although still probably. I also talked about the bull and bear cases for gold. Feel free to give it a read and if you enjoy how I break down markets, be sure to give me a follow as I post like this for all major markets.
