Gold snooked many...

COMEX:GC1!   Gold Futures
Previously mentioned that Gold was in a downtrend... and despite a December rally that started a lot of Gold-to-the-sky talk, I had doubts and hence, no update post as I was patiently observing. Friday proved my suspicion correct as Gold dropped well below the 1900 level after breaking above 1950 for a day. The Friday Gold drop wiped out the month of December's gains in a day. Big hint here.

Nonetheless, one of the major reasons for being suspicious about the rally was that the Top 8 traders were obviously selling Gold , not buying.
The bottom most panel (yellow line indicator chart) is the Top 8 Net positions.
From May to June 2020, the Top 8 traders were accumulating already. And when the non-commercials started joining in the accumulation party, Gold prices took off.

December 2020, the Gold rally was supported by retail and clearly, non-commercials (until Christmas). However, it is clearly observable that the Top 8 Traders were distributing instead.
Over and above that, technicals show that Gold has a trend change, and needed to consolidate first. MACD was in bearish territory, and price just bounced off 1800 support and channel support despite that there was a large harami type candlestick pattern indicating a couple weeks of Gold rally in December. Well, that has ended... promptly.

This week, we saw a break out of channel resistance, and then failure of that break out. Bad news... this typically suggest a breakout on the other side to follow.
This can be targeted to be around Feb, at about 1650, if it were to plummet over the next few weeks. Probable at this point as the massive bearish engulfing (after channel breakout failure) is strongly suggesting... I expect to see some small bounce, followed by more of a dive in Gold over the next two to three weeks. Breaking down and out of the channel support represents good opportunities to look for a trend change (back to bull trend).

Oh wait... there is a BRB system buy signal, which I intend to discretionarily ignore for now. Perhaps take into consideration IF there is a bounce off the 55EMA in about two weeks.

Anyways... Do see my following post about the USD (and the GDX too). It spiked, and contributed to Gold dropping fast on Friday.


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