Brexit, US elections, Kim's rocket season... Just a few of the news what drived gold's move out of the lows or pushed it into the deep. What will be the next news what drives it out from the recent lows I don't know but I guess we will get it know soon. There is always a story to explain the actual rally or drop.
Yesterday we broke the down trendline finally and we are having a follow through today. All the indicators are printing divergencies : RSI, MACD, TSI. The next thing I would like to see a close above the 10 EMA today or tomorrow. The next mission is to break back into the blue range box what we broke down a few days ago.
You will hear it again that I'm too early with this call. I still think it's better to enter before a breakout than to wait for a breakout and bleed in a severe pullback when bears try to take control in the relic. If it breaks out today or tomorrow it will be a big 20$ up day. You can enter after a big up day of course but very often there is a correction so you have to wait while price is correcting and your account is going down...
Currencies are showing the signs of the reversal too. It will support idea. I will post a few curreny chart later below this idea.
First of all I have a new pair to watch, the Yuan: China had weakened the Yuan during the last few months. It seems they've done a good job and the Yuan is ready to rally again. That will weaken the USD.
The USDJPY also breaking down after a few months of Yen weakeening. If the Yen rallies again the USD will drop.
The EurUsd sitiing on a strong support. I doubt it will be able to break it here. The strengthening Eur weakens the dollar too.
So the currencies ready to move in the direction of dollar weakness.
The stock market will end up its rally during the following 2 weeks and we will have another correction before it can break out of this consolidation.
And the crushing bitcoin will also offer some fresh cash for our gold rally too. Thin market but some of that money also will land in the precious metal sector.
Let's see how this plays out in the following few days.
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We have the last ingredient for the rally: failed try to break down again.
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And we have our news we were waiting for: “Currency crisis in Turkey”
The text was not posted with the pictures: They will break down the channel to produce extreme bearish sentiment and the reversal can come after that only.
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One can add here or those who stopped at 1204 ( I warned many people in personal message )can reenter longs.
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There might be a few more dollars down tomorrow but we are done with the drop for a while.
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The panic broke down the descending channel during the early Asian session.
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We have extremes we haven’t had the last decades.
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Time for a weekly update.
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Gold COT is out
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Comercials increased the longs positions from 154203 to 164195 and short contracts decreased from179812 to 171545. The commercials are short by 7350 contracts. Usually they have 200-300.000 (!!!) short contracts as they are hedging the production.
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When last time we had this low net short position at the commercials gold rallied 300 $ in 6 months.
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The commercials are actually near to long gold. They are mining it. So when you produce something and buy the same thing on the stock exchange you are fool or you know something.
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THis is my idea when we had almost the same situation.
The yearly bottom is in for gold. We are going to see 1250-1300 in 2 months . The back test of 1160 is off of the table. It’s going to be a V shaped rally.
How can you say 1160 is of the table now? to be frank, i prefer to see Fridays COT report which will show if covering happened of short contacts in 1.5 weeks back huge dip. Even $ goes down but Gold and Miners not picking up. short term techincals still tells me that it may go to 1160 one more time
@LetsBeMillionaire, no short cover yet. Today or next week Mondey-Tuesday large specs might cover (above 1205) and commercials are close to net longs. They will not cover shorts.
The miners decayed on me too much on this longer run. Not my finest work. :( This week's pop may be the last chance to get out hopefully tagging the 200MA.
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We will see after Powell speech today....
RobinChong
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Oh boy what makes you so certain? Gold rarely gives a straightforward move.