Gold breaking out again, but wait...
The Gold GC1! Weekly chart shows a repeated pattern where a corrective wave forms a wedge and then breaks out.
This has had happened previously, and it is followed by a relatively strong bull rally. Also plotted are the net positions of the Non-Commercials and the Top 8 Traders, according to CFTC data. And again, it shows a repeated pattern where there is a breakout of Non-Commercials net positions (Orange line, lower panel) with a concomitant breakdown of Top 8 Traders net positions (Yellow line, lower panel). The cyan horizontal lines mark the week where the breakouts occur, and you can see the repeated pattern.
One observation is that in the last two times, MACD cross up occured after retracement to near the zero line. This time, all else appearing similar, the MACD is falling with momentum instead of crossing up. This could be an indicator to suggest that this breakout might be limited, and could be the last one before resumption of further downside. At this point, it is worth a cautionary note, which otherwise, appear to see Gold being on a bullish breakout.
This has had happened previously, and it is followed by a relatively strong bull rally. Also plotted are the net positions of the Non-Commercials and the Top 8 Traders, according to CFTC data. And again, it shows a repeated pattern where there is a breakout of Non-Commercials net positions (Orange line, lower panel) with a concomitant breakdown of Top 8 Traders net positions (Yellow line, lower panel). The cyan horizontal lines mark the week where the breakouts occur, and you can see the repeated pattern.
One observation is that in the last two times, MACD cross up occured after retracement to near the zero line. This time, all else appearing similar, the MACD is falling with momentum instead of crossing up. This could be an indicator to suggest that this breakout might be limited, and could be the last one before resumption of further downside. At this point, it is worth a cautionary note, which otherwise, appear to see Gold being on a bullish breakout.
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