CENTRAL BANK GOLD BUYING IS AT THE HIGHEST SINCE 1967
At the moment of publishing this report, the yellow metal is closed at $1330 while silver had a weekly close of $16.Let's start the analysis with the bond market, we have witnessed The rise in equity market along with the bond market since the start of 2019. The equity market is still trading lower than there all time Tops however we have seen the dramatic correction since the start of the year. The most likely cause for bullish development in both the markets is the dovish move by fed however at the moment it seems bond prices are way overbought and about to reach their strong resistance zone soon but why does bond market matters in the first place for gold and silver ,well both market usually share a positive correlation while it's a bit strange that many gold analysts don't talk about the relationship between bond and precious metal market while the size of the bond market is significantly bigger than the equity market.
There's another reason to watch this gold rally closely as most of the momentum indicators show that gold has reached it's overbought territory now. Gold RSI is highest since yellow metal reaches it's all-time top however we have also witnessed the same RSI level when the precious metal market was getting prepared for the bull run. The most interesting news is that central bank gold buying is at the highest since 1967 which is also boosting the confidence of pemma bulls.
one of the analyst Morgan expects gold to reach 1420 and not get above $1450.He sees the gold/silver ratio falling to 74/1, putting silver up to $18 or $19.Morgan sees a recession coming this year, while he sees the mainstream won’t acknowledge it until 2020. Are we agree with Mr. Morgan forecast?
Absolutely not however the reason to write this bullish forecast was to show you that even those analyst who believes that a major bull run is about to come in gold market are not expecting prices to Go above $1420 which in itself is too optimistic which proves that expected higher price is quite restricted in size while the downside is significant which makes the short position very lucrative but not at the moment only when prices will move higher.
$1365-1370 serves as a critical resistance and Gold is unable to break above these level from 5 years and already made 4 attempts, The upcoming one will be the 5th attempt. does it seem an informed decision to open a long position for predicting the smaller limited $50 move? or do you think it'll be a good idea to go short on higher levels to take advantage of very low risk and enormous reward setup-$320 move? The latter seems more informed decision however if prices will correct from these level we may open a long position in precious metal sector but right now it's worth waiting. gold is threatening a deep correction but still we would not like to add any positions in our portfolio until unless gold move even higher and then breakout below the key support which helps to add more confirmation to our short position. At the moment we can feel the euphoria among investors and traders towards investing in the precious metal sector which could drive the prices even further if the price will break above $1370 level $1400 level will be easily in the cards. However even after having a sense of euphoria among investors we are not adding any long positions as we don’t think it will be justified from the risk and reward perspective,However if prices will retest the support of $1310-$1320 we could think to go long–
“The euphoria among investors and traders can easily take price up to $1365-1370 level but as we all know all parabolic run end up with the same result and right now gold is threatening a deep correction but still we would not like to add any positions in our portfolio until unless gold move even higher and then breakout below the key support which helps to add more confirmation to our short position”
There's another reason to watch this gold rally closely as most of the momentum indicators show that gold has reached it's overbought territory now. Gold RSI is highest since yellow metal reaches it's all-time top however we have also witnessed the same RSI level when the precious metal market was getting prepared for the bull run. The most interesting news is that central bank gold buying is at the highest since 1967 which is also boosting the confidence of pemma bulls.
one of the analyst Morgan expects gold to reach 1420 and not get above $1450.He sees the gold/silver ratio falling to 74/1, putting silver up to $18 or $19.Morgan sees a recession coming this year, while he sees the mainstream won’t acknowledge it until 2020. Are we agree with Mr. Morgan forecast?
Absolutely not however the reason to write this bullish forecast was to show you that even those analyst who believes that a major bull run is about to come in gold market are not expecting prices to Go above $1420 which in itself is too optimistic which proves that expected higher price is quite restricted in size while the downside is significant which makes the short position very lucrative but not at the moment only when prices will move higher.
$1365-1370 serves as a critical resistance and Gold is unable to break above these level from 5 years and already made 4 attempts, The upcoming one will be the 5th attempt. does it seem an informed decision to open a long position for predicting the smaller limited $50 move? or do you think it'll be a good idea to go short on higher levels to take advantage of very low risk and enormous reward setup-$320 move? The latter seems more informed decision however if prices will correct from these level we may open a long position in precious metal sector but right now it's worth waiting. gold is threatening a deep correction but still we would not like to add any positions in our portfolio until unless gold move even higher and then breakout below the key support which helps to add more confirmation to our short position. At the moment we can feel the euphoria among investors and traders towards investing in the precious metal sector which could drive the prices even further if the price will break above $1370 level $1400 level will be easily in the cards. However even after having a sense of euphoria among investors we are not adding any long positions as we don’t think it will be justified from the risk and reward perspective,However if prices will retest the support of $1310-$1320 we could think to go long–
“The euphoria among investors and traders can easily take price up to $1365-1370 level but as we all know all parabolic run end up with the same result and right now gold is threatening a deep correction but still we would not like to add any positions in our portfolio until unless gold move even higher and then breakout below the key support which helps to add more confirmation to our short position”