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Gold/AUD - Pullback - Buying Opportunity?

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OANDA:XAUAUD   Gold/AUD
I usually get quite frustrated with the Wall Street idiom of "buy the dip" what amounts to the gross over simplification of an entire field of study to "buy when big line go down" is quite annoying.

That being said...

When i see Gold prices dropping in the current financial and economic climate, YES please! I'll buy that dip all day long

As you can see from the chart below, we have a very nice weekly MACD cross, this has historically been quite a nice sign of a decent pullback in our future, usually to the 21 ema as a minimum.


Furthermore, the weekly RSI is also showing signs of weakening momentum, with the typical pullback landing Gold within the $2,400-$2,500 range, as minimum.


That being said, Aussie stocks are looking a little long in the tooth, with the all ordinaries hitting the resistance i outlines several weeks ago, and while there is still some room to move higher, and in fact we are in a near-term uptrend barring a close below the 5,200 mark, i am expecting the equity markets to continue to deteriorate over the coming weeks and months.

Even as the Aussie economy does begin to 'reopen' and loosen certain restrictions, that will amount to very little, as Australia is still predominantly a resource based economy, reliant on exports of minerals and raw materials. The economy's struggles will be exacerbated with the damage to oil prices, and any real recovery will be out of the question until trade begins to resume.


So the equity markets are suggesting HIGHER gold prices, and the gold charts are suggesting a possible pullback (confirmed with a weekly close below the 9ema).

With the global economy still in tatters and as the world slowly begins to awaken to this fact, Gold looks very likely to catch a bid.

Therefore, any dip within gold is one that i am more than happy to follow that oh so simple idiom of "buy the dip"


-TradingEdge

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