Gold seems to be forming a diamond top reversal pattern. These patterns are not so common but do serve as a strong indicator as to what direction the trend is turning to. Gold has risen in the past few months in a very dramatic fashion. If you take a look at the rsi on the 4hr chart you can see that a divergence has been building. In the past few months the price of gold has hovered over the 50ema, if it breaks below and doesn't bounce back above then this will be a strong indication of a trend reversal. The height of the diamond pattern puts us at an estimated target of $1460/oz. Now gold has been very strong lately so we would have to wait and see if a break occurs in the first place. News flows have been very frequent and trends can change on a dime, so be very cautious. I would only short if there is a clear sustained break downwards from the diamond. But don't get it twisted folks, Im very very bullish on gold in the mediate to long term.
Negative yielding nominal rates all over Europe and the world are causing an influx into safe heaven assets such as gold, in fact there is an estimated $16 trillion dollars worth of bonds offering negative yields. With mounting pressure on the U.S federal reserve to adhere to such policies in order to stay competitive and to keep the dollar under control, its safe to assume this stampede of gold investors will continue. The World Gold Council just stated that $2.6 billion dollars flowed into gold ETFs this past July alone. With Central banks sounding more and more dovish and starting new rounds of QE, gold is set to be one of the biggest beneficiaries to such an outlook. The United States is heading towards negative bond yields itself, you may argue that we are already in negative Real rates already folks. The federal reserves low interest rates for a record breaking extended period of time has caused the middle classes turmoil all over the world. With populism on the rise and trade tensions brewing, the de-globalization of the world is at play.
Negative yielding nominal rates all over Europe and the world are causing an influx into safe heaven assets such as gold, in fact there is an estimated $16 trillion dollars worth of bonds offering negative yields. With mounting pressure on the U.S federal reserve to adhere to such policies in order to stay competitive and to keep the dollar under control, its safe to assume this stampede of gold investors will continue. The World Gold Council just stated that $2.6 billion dollars flowed into gold ETFs this past July alone. With Central banks sounding more and more dovish and starting new rounds of QE, gold is set to be one of the biggest beneficiaries to such an outlook. The United States is heading towards negative bond yields itself, you may argue that we are already in negative Real rates already folks. The federal reserves low interest rates for a record breaking extended period of time has caused the middle classes turmoil all over the world. With populism on the rise and trade tensions brewing, the de-globalization of the world is at play.