Good morning traders! I hope everyone is having a good weekend so far. If you're like me then you probably take advantage of the markets being closed to reset chart setups and look for new market indications formed during prior week closures. compared to many of you here taking the time to read my version of where the market is heading, I'm just beginning to crawl in terms of how long I've been trading compared to most. I still have a long way to go but through my ideas and outlooks I hope to start earning your trust as a reliable author in the community.
With that being said, I'm going to use todays analysis as an opportunity to do just that; with an in depth overall view on my favorite commodity, both in actual physical form and even more as a tradable metal in the Fx market -GOLD. All the information I will be relaying, especially under the fundamental side will be entirely based on my own conclusions using knowledge I've gained through extensive research to best predict the highest probable future direction in the market.
Before I bore you all to sleep, lets get the show rolling. First off; Technicals
The quickest thing to spot at a glance is the overall ranging price action on the monthly timeframe. Ever since it entered this range on June of 2013, Gold has unsuccessfully been able to get a closure above its resistance level of 1348 despite FOUR different attempts that started from its range level support level of 1186. Its also worth noting that in its Six years of trading within this range, the most price ever traded with closures above or under its consolidation box for a consecutive period was during that seven month stretch which gave us the monthly fake-out illustrated above.
On our weekly timeframe, I wanted to make note of the two most important factors that entirely pieces together my whole outlook on gold and its next direction. First thing I have noted on this chart for you is the source of where this 4 week, 1000+ pip surge got its kickstart from (I will get deeper into details on this area when I tap into my fundamental outlook shortly). secondly, We have the Obvious monstrous weekly engulfing candle from last week, increasing the value of gold by $50/ounce, closing at $1398.80 by Friday afternoon.
The level all of us should be eyeing very closely at the moment is 1395.83 on a technical point of view. A failure to maintain price above this level could let the sellers take control, at least momentarily and we could potentially see 1364 once again before continuing its massive bull run. Although I do see that as a potential route, It would be very hard for me to enter any shorts unless the market shows some stronger signs of a reversal, even if just momentarily. I see the much higher probability scenario of gold executing a move like this setup I marked on the 1 hour timeframe above. For this to play out, we would need to see a strong push by the bulls right out of the gate. If support is found on 1405.92, that will be my next ideal entry point for a buy with my potential first take profit target in the 1433 region.
Phase 2- The all so important Fundamentals
I will keep this section as short and to the point as possible, only mentioning what I believe is having the biggest impact on the gold market during this surge in value.
For starters, we have to take a step back from the common and most popular idea that this sudden increase in price is being caused by investors running to gold as a safe haven. Let me put it this way, lets say you had no access to the gold chart prices during this four week run, and I were to ask you for your take on how much more worried you have become on the state of the US economy as well as the global economy from last month to this month. Including all the important economical factors as well as news that would affect the general public and cause a broad sense of actual fear, would you tell me things are much worse than they were just one month ago? Enough of a difference that would actually be the spark and accelerator of gold gaining $115 in value per ounce in just one month on the all so mentioned "fear factor" towards buying it? I find it hard to believe anyone would truthfully answer yes in such scenario.
Now to add another key point; wouldn't the overall majority of investors all have to be on the same page for a move like that to be possible, in terms of how much money it would actually take to purchase such high supplies of gold off the market in such a short period of time? Lets say it were mathematically possible, which at that point i'd say this point would be invalid, at the least we'd have to agree they would have to know something we don't. Especially since there is no rational reason as to why the equities market made a complete turn around after losing half its yearly gains just one month prior, coincidentally at the exact same time that gold was booming off "risk aversion".
The most logical conclusion based off those two points, not even including the historical price action correlation Ive spotted along The dow, Gold, and the dollar index, is that investors are finally going to get what they've been waiting for all along: The highly anticipated Fed Rate Cut as soon as next month. The US dollar already started to get dumped, which in turn spiked the value of gold. I cant forget to mention the kind of impact the central banks must have had after loading up the vaults with amounts of gold only they have the access to. The kind of amount needed to finally push the "Gold Bears" to extinction.
If you found this of use in any way, spare a follow or some feedback. My reputation score would greatly appreciate it! I'll be actively sharing new setups as soon as I find anything worth taking a look at.
Thanks!
With that being said, I'm going to use todays analysis as an opportunity to do just that; with an in depth overall view on my favorite commodity, both in actual physical form and even more as a tradable metal in the Fx market -GOLD. All the information I will be relaying, especially under the fundamental side will be entirely based on my own conclusions using knowledge I've gained through extensive research to best predict the highest probable future direction in the market.
Before I bore you all to sleep, lets get the show rolling. First off; Technicals
Phase 2- The all so important Fundamentals
I will keep this section as short and to the point as possible, only mentioning what I believe is having the biggest impact on the gold market during this surge in value.
For starters, we have to take a step back from the common and most popular idea that this sudden increase in price is being caused by investors running to gold as a safe haven. Let me put it this way, lets say you had no access to the gold chart prices during this four week run, and I were to ask you for your take on how much more worried you have become on the state of the US economy as well as the global economy from last month to this month. Including all the important economical factors as well as news that would affect the general public and cause a broad sense of actual fear, would you tell me things are much worse than they were just one month ago? Enough of a difference that would actually be the spark and accelerator of gold gaining $115 in value per ounce in just one month on the all so mentioned "fear factor" towards buying it? I find it hard to believe anyone would truthfully answer yes in such scenario.
Now to add another key point; wouldn't the overall majority of investors all have to be on the same page for a move like that to be possible, in terms of how much money it would actually take to purchase such high supplies of gold off the market in such a short period of time? Lets say it were mathematically possible, which at that point i'd say this point would be invalid, at the least we'd have to agree they would have to know something we don't. Especially since there is no rational reason as to why the equities market made a complete turn around after losing half its yearly gains just one month prior, coincidentally at the exact same time that gold was booming off "risk aversion".
The most logical conclusion based off those two points, not even including the historical price action correlation Ive spotted along The dow, Gold, and the dollar index, is that investors are finally going to get what they've been waiting for all along: The highly anticipated Fed Rate Cut as soon as next month. The US dollar already started to get dumped, which in turn spiked the value of gold. I cant forget to mention the kind of impact the central banks must have had after loading up the vaults with amounts of gold only they have the access to. The kind of amount needed to finally push the "Gold Bears" to extinction.
If you found this of use in any way, spare a follow or some feedback. My reputation score would greatly appreciate it! I'll be actively sharing new setups as soon as I find anything worth taking a look at.
Thanks!