After breaking out of the monthly downtrend( market by red trend line ) in Aug of 2019 Gold has returned 25%
Is possible that Gold will find resistance on old ATH(all time high) and resistance of channel 2 around $1900
Upon a rejection from this resistance a short position might be profitable untill $1500( conservatively)
SInce Gold is a horrible hedge against market gyrations and possible sell offs, Gold falling beyond the 50% retracement ( if it comes down ) could indicate a further decline in equities.
As long as the 50MA holds on the monthly chart , we could esipulate a possible cup and handle formation on the monthly chart with resistance of channel 2 acting as the handle( that's a chart for another day )
Although we still believe that GOLD has around 8% upside a bullish trade here doesn't justify the risk.
So for now we will wait untill $1900 is rejected and tested ( at least on the weekly chart) before we start shorting it.
On our chart we have $1500 as a target area for around 2022..but with elevated volatility $1500 could come in much sooner than expected( if it does at all)
Our main objective is to short Gold to $1500 but stay rather conservative and only take short trades from resistance of channel 2 to limit any potential downside on our trade.
So, as the days passes the resistance of channels will change to the downside and a trader must adjust accordingly, be aware and flexible on his approach.
Although these numbers may or may not come to fruition , please keep in mind these are perceived support and resistance based on our strategy and may differ from other traders.
$1600 would be my base, but don't expect to get gold at that price, the premiums will just keep it at 1800 or higher. Gold is in a new bull market and has years to go up.
JoeOddlots
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@TruePrimeOne, Never expect anything ...just have a plan in case it does. Good thing about having a plan is that it can be adjusted in case things break down or breakout. In any case ,We don't plan to go long Gold if it did go to $1600 or lower...Our plan is to remain short Gold based on overall market condition and we expect conditions to deteriorate rather fast late in the year.
TruePrimeOne
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@JoeOddlots, Sure anything is possible, but the probability of going back down in less likely then a continuation up. Your trend line down from the top of 11 to july 2019 shows the break of that downward trend. Then you look at a massive base that has formed from 2013-2018. Conservation of momentum, it takes time to build up. Also look at the larger picture, your zoomed in from 2006 to now. but the trend is still up. Just my 2 cents.