Gold into the elections...
So we may say 'as expected' ... on the waterfall from $1,970 and a clear reversal with little drawdown or need to panic.
The notes to this game with Gold , from which we clearly have been exploiting a lot of value as there are other examples of the moves in this exchange..
Looking at the latest round of dismal Covid data it seems as those we are waiting for the final ✅from mainstream media before governments begin the manoeuvre of circuit breakers or etc. While stimulus is a big part of that story, there is no amount of printing that can counter deflation.
As mentioned before when globalisation contracts, it creates a deflationary tsunami on the underlying capital formations. We then have to factor in bottlenecks on the supply side from lockdowns, agricultural shortages now entering into play as farmers could not yield and etc which create inflationary pressures on the cost of goods at the supermarkets. You get the point.
As long as these two forces clash, risk markets will struggle into the US elections and 2021 - recommend looking through the polls and bookies odds which are cementing a Biden sweep as a done deal. The election remains Trump’s to lose despite how mainstream media paints the picture.
It is important for us to look at this from a macro perspective, if you are still short there isn't anything to change or do as we await the test of $1,808 and $1,762, if you are holding longs from way below or looking to add positions this retrace leg down would move us into calmer waters and should make it easier to add once more. If you are looking to setup shorts into the follow election positioning flows then follow the simple two premises:
(a) When buyers are restrained at $1,910/$1,920 it makes for a good value opportunity to load fresh shorts
(b) Consequently the destruction of the soft resistance on a closing basis would call into question the aggressive short view and mean in no way advancing more positions, it would also imply that we should begin to let go of any previous operations.
To illustrate this in more depth, consider the following:
Of course we could say chart fitting and etc, but this is the best illustration I have on tradingview to show the pressures before and after from the lockdowns and covid chapter I. Seller choose to attack the base as USD remains a guiding presence - this idea is no less imaginative as we are in the same complacent environment with the Northern Hemisphere entering into Winter.