Gold Monthly/Weekly update 03-06.07
Gold bounced out of the daily zone on Friday, but without strong manipulation, which means to me that it will continue down. Most likely we will see the price test the 1940-50 area or even the 2000 area(unlikely scenario) before continuing down. These two areas have proven to be important areas where the price has consolidated many times.
Macroeconomics
The FED announced a few weeks ago that we will most likely see at least two more IR hikes by the end of the year, which is the main Gold driver for now. There were few speeches after the last FOMC meeting and they were all hawkish about the near future.
Inflation is much lower, but still above the 2% target. We have seen inflation come down in the past, but only for another bullish swing. I think this is the FED's main concern, which makes them not believe the current numbers.
The labour market is very strong, but slowly weakening, which is another reason for the FED to keep raising interest rates.
Stocks are on a bull run, especially with recent news that business optimism is rising. There is also speculation that we may not see a new recession. The latest GDP reading was better than forecast, which is a small light at the end of the tunnel.
Current macroeconomic indicators suggest that the FED has no reason to pause interest rates in the near future.
Top-Down Analysis
We all expected a new all-time high, but forgot the main rule of consolidation - 80% of breakouts fail.
Gold is still in a range. In my opinion, it will reach the 1800 area again, where the most volume is. There is also a chance to go further down to test the lower band of the range, but the price is far from there.
Gold has formed a low liquidity bearish move on the monthly chart, lets see how far it will go.
A doji formed last week, indicating that the price will continue to fall. For now the target is 1870 liquidity and after that the price will reach a weekly double manipulation where it will bounce or consolidate.
Swing projection
July and August are normally bullish months for gold, but not in such a high interest rate environment. I do not expect a big bounce, not before the weekly manipulation is reached.
Benchmark
The benchmark is in bullish territory. This confirms that we may see a bullish week, or at least a small rally, before the current bearish trend resumes.
COT Reports
The professionals are still quite bearish on gold and there seems to be indecision on silver.
US Yields
2Y yields have risen very aggressively since the last FOMC meeting. Rising yields are another reason to believe that gold will continue to fall in the longer term.
XAUUSD vs GDX
The GDX is falling slowly but very steadily within this bearish channel.
Gold vs Silver
This is my forecast for silver. It could bounce off the lower bands and this could happen at the same time as gold hits the weekly double manipulation.
Silver is more bullish than gold and yields do not affect it as much as gold.
Elliot Wave
The structure is not very clear, but it seems that gold has started the second wave of the impulse.
Wyckoff
The price action looks like a Wyckoff accumulation. Therefore, it may go higher for a while, fooling traders into thinking that gold has reversed. It may be, but there is not much evidence of it at the moment.
Retail Support and Resistance
Gold has almost reached its mean, but it is too early for me to talk about a major reversal.
Momentum
The oversold RSI may push the price higher for a while, but the RSI is in bearish territory.
I would wait until the price reaches the lower band, which is a proven reversal marker. This time it is lying with the weekly double manipulation.
There seems to be a cluster in this area (1850-1800) - double weekly manipulation, monthly pivot point, lower bands on GDX and silver, main moving average on gold, important psychological area, most volume in 2-3 year consolidation, lower band on momentum indicator, potential Elliot wave cycle, liquidity taken by Wyckoff traders.
This is the area where we should expect a major bullish move, not now.
Macroeconomics
The FED announced a few weeks ago that we will most likely see at least two more IR hikes by the end of the year, which is the main Gold driver for now. There were few speeches after the last FOMC meeting and they were all hawkish about the near future.
Inflation is much lower, but still above the 2% target. We have seen inflation come down in the past, but only for another bullish swing. I think this is the FED's main concern, which makes them not believe the current numbers.
The labour market is very strong, but slowly weakening, which is another reason for the FED to keep raising interest rates.
Stocks are on a bull run, especially with recent news that business optimism is rising. There is also speculation that we may not see a new recession. The latest GDP reading was better than forecast, which is a small light at the end of the tunnel.
Current macroeconomic indicators suggest that the FED has no reason to pause interest rates in the near future.
Top-Down Analysis
Gold is still in a range. In my opinion, it will reach the 1800 area again, where the most volume is. There is also a chance to go further down to test the lower band of the range, but the price is far from there.
Gold has formed a low liquidity bearish move on the monthly chart, lets see how far it will go.
Swing projection
July and August are normally bullish months for gold, but not in such a high interest rate environment. I do not expect a big bounce, not before the weekly manipulation is reached.
Benchmark
The benchmark is in bullish territory. This confirms that we may see a bullish week, or at least a small rally, before the current bearish trend resumes.
COT Reports
The professionals are still quite bearish on gold and there seems to be indecision on silver.
US Yields
2Y yields have risen very aggressively since the last FOMC meeting. Rising yields are another reason to believe that gold will continue to fall in the longer term.
XAUUSD vs GDX
The GDX is falling slowly but very steadily within this bearish channel.
Gold vs Silver
This is my forecast for silver. It could bounce off the lower bands and this could happen at the same time as gold hits the weekly double manipulation.
Silver is more bullish than gold and yields do not affect it as much as gold.
Elliot Wave
The structure is not very clear, but it seems that gold has started the second wave of the impulse.
Wyckoff
The price action looks like a Wyckoff accumulation. Therefore, it may go higher for a while, fooling traders into thinking that gold has reversed. It may be, but there is not much evidence of it at the moment.
Retail Support and Resistance
Gold has almost reached its mean, but it is too early for me to talk about a major reversal.
Momentum
The oversold RSI may push the price higher for a while, but the RSI is in bearish territory.
I would wait until the price reaches the lower band, which is a proven reversal marker. This time it is lying with the weekly double manipulation.
There seems to be a cluster in this area (1850-1800) - double weekly manipulation, monthly pivot point, lower bands on GDX and silver, main moving average on gold, important psychological area, most volume in 2-3 year consolidation, lower band on momentum indicator, potential Elliot wave cycle, liquidity taken by Wyckoff traders.
This is the area where we should expect a major bullish move, not now.
Strategy:
-Macroeconomics
-Market manipulation
-Liquidity calculation
-Economic and price action indicators
-MTF Pivot points
*Fundamental analysis
*Technical analys
*Quantitative analysis
Free group:
t.me/serpentforexclub
-Macroeconomics
-Market manipulation
-Liquidity calculation
-Economic and price action indicators
-MTF Pivot points
*Fundamental analysis
*Technical analys
*Quantitative analysis
Free group:
t.me/serpentforexclub