After reaching highs in August, gold has been taking back some gains on a tremendous run... But a bounce is coming.
3 Major Tenets
Chart #1:
Since The summer, Gold has run a continuous pattern: Running up on a trend, and falling on a bull flag channel before popping again. Also, The MACD on the daily chart hasn't been this low in a few years. Though momentum is running fast negative and the MA lines are diverging. Wait until we start to see the lines converge before buying in a position.
Chart #2:
Gold tends to be negatively correlated with the SP500 (makes sense since gold has been renowned as an alternative asset class especially when hedging). We see in the ellipses displayed that once gold and the SPY converge, there is divergence following. Up until recently, Gold usually diverges in a positive direction. Again due to appreciation in alternative asset classes in tandem with the global economy (crypto, whiskey, sneakers, etc. Gold fits in here). We are seeing some convergence between the two - That being said, with convergence comes following divergence.
Chart #3:
Coinciding with chart #1, the bull flag retracements we see after a run take place at significant zones. Zones that act as supply, then are broken, come back as a zone of demand, and rip higher. What we see now is a previous supply zone where gold prices are coming down to once again be absorbed up and reach the top of the "flag" or regression channel.
All love and best of luck traders
3 Major Tenets
Chart #1:
Since The summer, Gold has run a continuous pattern: Running up on a trend, and falling on a bull flag channel before popping again. Also, The MACD on the daily chart hasn't been this low in a few years. Though momentum is running fast negative and the MA lines are diverging. Wait until we start to see the lines converge before buying in a position.
Chart #2:
Gold tends to be negatively correlated with the SP500 (makes sense since gold has been renowned as an alternative asset class especially when hedging). We see in the ellipses displayed that once gold and the SPY converge, there is divergence following. Up until recently, Gold usually diverges in a positive direction. Again due to appreciation in alternative asset classes in tandem with the global economy (crypto, whiskey, sneakers, etc. Gold fits in here). We are seeing some convergence between the two - That being said, with convergence comes following divergence.
Chart #3:
Coinciding with chart #1, the bull flag retracements we see after a run take place at significant zones. Zones that act as supply, then are broken, come back as a zone of demand, and rip higher. What we see now is a previous supply zone where gold prices are coming down to once again be absorbed up and reach the top of the "flag" or regression channel.
All love and best of luck traders
Comment:
See MACD divergence on chart #3
Comment:
Taking some profit here