Kumowizard
Short

Gold - Break and its consequences

FX:XAUUSD   Gold / U.S. Dollar
555 1 9
Massive selloff in Asia, after Gold             broke 1140 ultimate supp/resistance.

This break will have consequences:
- Volatility has been very low for long time. From now Gold             will be more agressive.
- Technical picture confirms a bearish break and continuation, however Gold             producers will massively cut production at/below 1100 USD/oz.
- Most importantly, with these kind of agressive dips the daily averages (Tenkan, Kijun and Kumo) started to drop very quickly. In case of a reversal, the entry Price for a counter trend or bullish swing trade will be lower.
- One more consequence: I understand even less why the hell Gold             is fundamentally a sell, when 3/4 of the world's CBs             are still dovish and/or even printing money, when inflation sooner or later will spike, when after some point people will have to admit the global bond bubble and the fiat ccy systems will fail somehow, etc. But I am not a fundamental trader, so I stopped most of my positions at 1145. I hold 5 % strategic Gold             in my portfolio only, and that is PHISICAL GOLD             , not a paper sht.


Physical gold is a sell, until the People's Bank of China announces it's desire to trade US Treasury securities for gold. Which it will do, as soon as the price of gold is so low, that everybody else is afraid to buy any, lest it go lower.

The Bank had very good teachers. The Roosevelt Administration in the US made the same move in 1933, cornering the bullion market for 4 decades, and displacing the Pound Sterling as global reserve currency, with the USD. China will do likewise...private-sector gold buyers with too much debt, will lose gold to the central bank, and will end up with bonds that might, or might not, be worth anything.
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