GOLD (GC1 Futures) Mid Term UpdateAs a refresher, in the previous weeks, I posted a mid term chart for GOLD - based on the Futures charts - which suggested a move down to a previous support area (around 1745 LONGTERM). That chart can be found here:
GOLD has now moved around 100 points from the suggested entry point. The sell off in recent days has been very intense; this is due to the relentless strength of the US dollar, supported by reasonably bullish data releases which support the FED's "higher for longer interest rates" narrative.
There may have been a turning point yesterday.
NFP released, showing a HUGE gain of over 300K jobs, massively exceeding the expected 170K job forecast, however, the picture is not so rosy. On closer inspection, full time jobs were lost, part time jobs were gained and more people seem to be taking on 2nd and 3rd jobs to meet ends meet. A big NFP number is only as strong as the quality of the data.
This may explain why earnings (month on month) were down, but nonetheless, GOLD has surged on this data release as it appears market participants are starting to see the cracks in he US economy.
I am expecting a retracement to either:
1) The RED BOX ZONE: This coincides with the 0.5 FIB of the recent daily wave down.
OR
2) The EXTENDED GOLDEN ZONE: This coincides the zone between the 0.618 and 0.71 FIB levels. This would also serve as a retest of the daily "M" pattern that was formed. While the pattern became over extended in recent days, it is still possible for the neckline to be revisited.
In terms of order execution, you can:
1) Wait for a retest of the GOLDEN ZONE of the 06/10 Daily candle.
2) Place a BREAKOUT LONG above the current PURPLE ZONE, with a SL below either the midpoint of the zone OR below the zone (providing you adjust your lot size accordingly)
3) Enter call positions around this area as it will be relatively low risk.
Please remember, this is not financial advice and is purely my personal opinion.