How does Gold fit in the current macro picture?
Many people think of gold as an inflation hedge, which isn't actually correct. Gold is a hedge on many other things and it has various interesting 'properties', however in the world we live in right its role is definitely isn't as clear as it used to be. Gold is a safe haven asset, but every time we get a liquidity crisis gold gets punished and the rises quickly. So why hasn't gold performed well while inflation was high, and what should we expect now?
To me gold isn't in the best spot right now. There are multiple triple/quadruple bottoms in the 1680 and 1450 areas, and the area below 1380 was never retested as gold broke out in 2019. So essentially these areas are areas of high liquidity which the market either wants to tap or truly break lower. Because all the people that bought there, can't make money and if they do it will be a rare occasion (such bottoms rarely hold forever except if they come when the market has formed a massive base after a long bear market).
Gold has tested both the monthly and yearly P and has been rejected twice. In that area we also have some horizontal resistance and the 350 DMA... So the momentum for gold isn't bullish, especially as the 2011 ATH turned back into resistance as gold failed to break and sustain above it. Until that ATH breaks cleanly, we should be cautious. Now if it manages to close above the pivots, chop for a bit between 1830 an 1920, then I think there might be some potential longs before the break of 1920.
To me gold isn't in the best spot right now. There are multiple triple/quadruple bottoms in the 1680 and 1450 areas, and the area below 1380 was never retested as gold broke out in 2019. So essentially these areas are areas of high liquidity which the market either wants to tap or truly break lower. Because all the people that bought there, can't make money and if they do it will be a rare occasion (such bottoms rarely hold forever except if they come when the market has formed a massive base after a long bear market).
Gold has tested both the monthly and yearly P and has been rejected twice. In that area we also have some horizontal resistance and the 350 DMA... So the momentum for gold isn't bullish, especially as the 2011 ATH turned back into resistance as gold failed to break and sustain above it. Until that ATH breaks cleanly, we should be cautious. Now if it manages to close above the pivots, chop for a bit between 1830 an 1920, then I think there might be some potential longs before the break of 1920.
