GOLD - THE BIGGER PICTURE
Hi team,
So far my Gold analysis has been on point over 80% of the time.
Chart analysis:
On the longer weekly time frame, we are back at the bottom of a large consolidating channel, the support of which has not been broken for almost 18 months. We are almost at the end of a descending correcting channel descending to this major support, the 5th wave of which is almost complete.
What to expect?
Look for price to reach right back to $1680 and then look for a short term double bottom. If we break this important level, we will see gold drop to multi-year lows. The question though, is this - do recent USD rally decisions hols out in the long term? If not, I expect this safe-haven currency to rise again.
Fundamentals:
Gold looks to be extending its rebound from the support region of 1680, while the US dollar index is taking a deep breath after a strong rally. The August Nonfarm Payrolls (NFP) and unemployment rate were be released on September. These announcements triggered severe market volatility. The unemployment rate has remained in the region of 3.5%. Investors and traders are particularly focused on wage growth, which is predicted to accelerate from 5.2% YoY to 5.3%. Weak NFP numbers are expected to exert pressure on the USD and strengthen the gold, as investors speculate that the Fed would soon abandon its aggressive stance and begin to ease. THIS is the big point - once the USD rally slows, we should be looking for buying pressure. On the other hand, labour market stability islikely to be affected by ongoing FED decisions, fueling predictions of another 75-point rate rise in September. The technical side of the gold market spells out the fundamental view because gold is on the major decision numbers where heavy volatility can cause massive moves. It is worth noting this is the 5th touch of this support, and historically we see a break on either 5th or 7th touch.
The key summary:
Gold is at a critical juncture. Significant global inflationary pressures can only be held at bay for so long by current aggressive FED policy - at some point something will have to give. Given the current flightiness of major players, and massive major market instability (think pan-European energy markets), expect an explosive move one way or the other - either we break major support and enter a free-fall, or markets sniff out pending Dollar weakness and rise again.
News
There are always masses of news events affecting Gold. We should focus on the really big ones - the makers and breakers - at this level.
Wednesday 7th September 1230-1435 GMT:
Here we will see multiple speeches - Barkin, Mester, Brainard. Expect groundwork to be laid prior to FED Powell speech on Friday.
What are we looking for? Signs of USD aggressive policy either slowing or ramping up - the prior indicates buy for gold, the latter a push for a retouch and possible break of major support.
Friday 9th September 1230 -1310
This is always the big one. Consensus is expecting job claims to rise a little this month - if higher than expected, FED policy control of the labour market would be undermined, and we could see a bullish run from Gold. Remember that it tends not to be data release, but the presser AFTER the speech that we see most volatility and major movement.
So what do I think?
I do not see FED Policy aggression to hold out beyond the early medium term at best. Look for Bullish pressure to remain after a possible second retest of 1680, and ride the channel back up to recent daily highs.
I will link back to this chart as we see what is going on over the coming weeks. My best advice? Be patient and wait for the market to make a major move - there's plenty of money to be made in either direction once it tells us what it's doing.
Like what I do? Please do like, share and comment - I work really hard to provide good, well researched content on here for you.
Be kind, trade safe!
DrBear
So far my Gold analysis has been on point over 80% of the time.
Chart analysis:
On the longer weekly time frame, we are back at the bottom of a large consolidating channel, the support of which has not been broken for almost 18 months. We are almost at the end of a descending correcting channel descending to this major support, the 5th wave of which is almost complete.
What to expect?
Look for price to reach right back to $1680 and then look for a short term double bottom. If we break this important level, we will see gold drop to multi-year lows. The question though, is this - do recent USD rally decisions hols out in the long term? If not, I expect this safe-haven currency to rise again.
Fundamentals:
Gold looks to be extending its rebound from the support region of 1680, while the US dollar index is taking a deep breath after a strong rally. The August Nonfarm Payrolls (NFP) and unemployment rate were be released on September. These announcements triggered severe market volatility. The unemployment rate has remained in the region of 3.5%. Investors and traders are particularly focused on wage growth, which is predicted to accelerate from 5.2% YoY to 5.3%. Weak NFP numbers are expected to exert pressure on the USD and strengthen the gold, as investors speculate that the Fed would soon abandon its aggressive stance and begin to ease. THIS is the big point - once the USD rally slows, we should be looking for buying pressure. On the other hand, labour market stability islikely to be affected by ongoing FED decisions, fueling predictions of another 75-point rate rise in September. The technical side of the gold market spells out the fundamental view because gold is on the major decision numbers where heavy volatility can cause massive moves. It is worth noting this is the 5th touch of this support, and historically we see a break on either 5th or 7th touch.
The key summary:
Gold is at a critical juncture. Significant global inflationary pressures can only be held at bay for so long by current aggressive FED policy - at some point something will have to give. Given the current flightiness of major players, and massive major market instability (think pan-European energy markets), expect an explosive move one way or the other - either we break major support and enter a free-fall, or markets sniff out pending Dollar weakness and rise again.
News
There are always masses of news events affecting Gold. We should focus on the really big ones - the makers and breakers - at this level.
Wednesday 7th September 1230-1435 GMT:
Here we will see multiple speeches - Barkin, Mester, Brainard. Expect groundwork to be laid prior to FED Powell speech on Friday.
What are we looking for? Signs of USD aggressive policy either slowing or ramping up - the prior indicates buy for gold, the latter a push for a retouch and possible break of major support.
Friday 9th September 1230 -1310
This is always the big one. Consensus is expecting job claims to rise a little this month - if higher than expected, FED policy control of the labour market would be undermined, and we could see a bullish run from Gold. Remember that it tends not to be data release, but the presser AFTER the speech that we see most volatility and major movement.
So what do I think?
I do not see FED Policy aggression to hold out beyond the early medium term at best. Look for Bullish pressure to remain after a possible second retest of 1680, and ride the channel back up to recent daily highs.
I will link back to this chart as we see what is going on over the coming weeks. My best advice? Be patient and wait for the market to make a major move - there's plenty of money to be made in either direction once it tells us what it's doing.
Like what I do? Please do like, share and comment - I work really hard to provide good, well researched content on here for you.
Be kind, trade safe!
DrBear
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