FX:XAUUSD   Gold Spot / U.S. Dollar
636 7 3
Gold             is in its 5 waves down (invalidation/reconvene if closes above 1220).

A few weeks ago, it broke below 1190 in what could have produced a sharp move down.

It was retained for 2 reasons:
1 - there is support line coming from the oscillations that started in Sep12.
2 - The Swiss referendum had created some expaction around CB             buying.

(2) will be cleared today and it seems the proposal will be rejected (no SNB buying).

The price could follow its course.

If 1120 is broken, it could dive hard to 970 where there should a significant rebound before maybe reaching 880/820 .
I am not sure it will go down (hence invalidation 1220), but if it goes to 900/820 it is probably a multi year buy.
What would be the best moment to sell/buy?
YaKa Trader420
well that depends what you believe.
if you want to short: stop 1220.
if you want to buy stop 1090.
it is a large stop either way.... I would wait and not initiate here
YaKa Trader420
forced to trade: short stop 1220 as i think 1120 will be retested in the next few days.
And when gold falls below 1100 and only one miner can produce with a profit, won't the miners just shut down and constrict supply?
YaKa kenadler3
yes - the production price seems to be 1200.

However: gold is not a necessary item like sugar or oil.

The yearly production is only 1% of the "float" I think.

And.... Extreme is almost a business plan in the market... You reasoning is very rational,.. I think the market often goes beyond "logical" boundaries to take out some intellectually correct stops.

It may last only 6 months below 1100, which lately good be seen as an excess in big picture.
If you agree production is around 1200 (for the majors) and around 1300 for the juniors, how far beyond "logical boundaries" can be expected? I can imagine not only mines shutting down at the 1000 level, but central banks including China, Russia, and India buying up as much as they can. Between reduced supply and increased acquisition by central banks, I cannot see gold reaching into the 800's.
YaKa kenadler3
20% beyond boundaries on an asset that just fell some 80% is no big deal. you may be right people will buy it... maybe the weakest hands will stop.
The only thing i know: 880 is no brainer buy.
It may find support earlier and 1100 is not broken yet.
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