FX_IDC:XAUUSD   Gold Spot / U.S. Dollar
Impending boom, buy gold! How many times have you heard that this week or over the last couple of months? If we look at the technical price chart and remove as many fundamental biases as possible, we begin to see that gold is currently trading in a trap zone (a level between the 0.382 and 0.618 fibo). As of today, the weekly candle is bouncing off of the 0.618 level that was formed between 2011 and 2016! If I was a large player in long gold contracts I would strongly think about unloading them for some USD right now. Heck, I probably would have unloaded them by now. What if price keeps going higher, you say? I'd buy the breakout of the all-time high, but not sooner. That's $1,900+.

Since silver is kind of related to gold we can also look at that market for clues. As you can see, silver has completely underperformed gold , but it's by no means a bullish case for silver . Actually, silver is currently stuck below the 0.11 fibo that was created after the silver bubble of 2011-2013 popped. Unless it gets over this level, there's no chance silver is going to turn bullish . If it does, it will be a good opportunity to sneak in a long trade (better than a gold trade) since a cross of the 0.11 fibo (around $18) could take silver to the 0.382 fibo (around $28). That would be a nice 50%+ trade!

PS. If you found this idea useful/interesting be sure to follow me on Twitter where I post more frequently. You can find the link on my TV profile page.


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