Gold weekly forecast 30.10 - 03.11

This week will be a very tricky one. My long term bias is still bullish but I am very cautious about the current price and we will see why later. In my opinion it is too high to buy and too bullish to sell. The last few days of the month are very manipulated, so the price could move very strangely. Banks may use the NFP to take profits and create a bearish week.

Gold reached 1H reaction area and could retrace from the current area, but 2030 area (grey area) is a strong manipulation on almost any time frame, telling me that the zone is very strong and the real retracement can happen from there.


Macroeconomics

This week I will not be watching the FOMC, employment or recession. Not because they are not important, but at the moment the geopolitical risk (war between Israel and Hamas) is too strong push gold higher, regardless of other factors.

On Friday, Israel started ground operations against Hamas and gold went to the moon. Over the weekend, Hamas struck back. In such a scenario gold may open with a bullish gap.


Top-Down Analysis

Monthly
As I said last week, gold is forming a strong bullish manipulation on the monthly TF. For me, this means that the metal will rise in the coming months.


Weekly

On the weekly TF I see the 2080 area as a target. We targeted this liquidity last time when gold reached it, but gold could not break through.


8H
Price has reached the first reaction zone and the second one is 2030. Because of the strong geopolitical factor, I cannot say which zone will be respected, but in my opinion we will see a retracement.


Benchmark

Although gold is rising very aggressively against all currencies, the sector is not moving. This is why the benchmark indices are also ranging.

This chart tells me that gold is outperforming the sector, which means there is no reason to buy another metal instead of gold.

The second thing is the divergence between gold and the other metals. If the sector is not moving in the same direction, gold is very likely to be overbought.


The first week we had a strong move from the banks. They wiped out the professional traders and bought.
In the second week, the professionals stepped in and bought.
In the third week, the crowds are coming. They see that the war does not stop and everyone buys.
When the crowd steps in, banks usually take profits. They need liquidity to cover their positions.


COT Reports



No change in positions - still bullish.



US Yields


Yields have reached the 5% level where Interest rates are.
There is also news that big players such as Bill Ackman are taking profits on their bond selling positions.

That is why I think that yields will pause for a long time or fall. In any case, this is a bullish factor for gold.


XAUUSD vs GDX


For the second week, the GDX is not rising and is diverging with gold. Something is going on and as always the retail traders will understand it too late.


Gold vs Silver


The second SMT divergence after the GDX. It is very strange that silver is not moving - not at all.


Volume Spread Analysis - Wyckoff patterns


Big rejection after the high was taken. Doji day on the futures market, made with a lot of volume.
And this is the 3d SMT divergence.

This chart is another signal that the price may be overbought.


Momentum


Gold is very overbought. As I said earlier, it is too high to buy.