GOLD SUPPORT?
Updated
Thanks for viewing,
Short-term short view (not shorting), then long again.
I can't see a very good reason for a gold correction other than;
- Everything needs to correct - it's never a straight-line move,
- It is possible that big banks (possibly even the Custodians for major gold ETFs) are being forced to sell-off reserve assets to cover losses or to put aside as contingencies for what look like to be a future MAJOR banking investigation and likely hefty fines,
- The drop will get deeper due to short-term traders using excessive leverage (massive inflow in 2020 of inexperienced traders won't help).
But, its not like US government debt, the US Federal Reserve balance sheet, massive money printing, global move away from the USD, or 10 year treasury yields (0.68%) suddenly got any better - so I see no reason for me or anyone else to sell physical gold. This is just a gift to people with the ability to add to their positions really. Yes big institutions and traders will do their thing buying and selling paper gold, but you and me can buy and hold - which negates many of the advantages that major trading houses and hedge funds have over the "small guy."
But, even the small players want to know where the price drops are likely to end, so that they can add to their positions. BTFD and all that. So this is where I am targeting for my next buy, like always I don't know if I am right. So I got out my magic number 8 ball and gave it a shake.
My TA is just about looking for areas that "line up", areas that people using various methods of determining support and resistance will target. The more that line up the better.
So I looked at the 200MA (and extended it with great artistic skill and flair,
RSI - which on the daily time-frame is right on the 30 level,
support from previous recent price peaks,
Fibonacci extensions - assuming a 1:1 extension of wave C,
Fibonacci retracement, and I ended up with the blue box.
The smaller sliver blue box between 1800 - 1807 is what I am thinking as both the 1;1 extension and a 1.618 extension of what may be the start of wave C down. I will buy here and buy again if it goes lower. Now that the gold/silver ratio is above 80 again, I will also be adding to silver positions in the expectation that silver will again out-perform gold when / if the bull market continues.
If the $1800 doesn't hold then watch the 200MA / 0.5 Fib retracement and the recent price peaks to form the next area of strong support in the mid to high 1700s.
I see USD2200 as a low estimate for gold by the end of 2020. If you hold positions in bullion ETFs, seriously consider moving to using non-bank bullion vaults (like Bullionstar in Singapore bullionstar.com/?r=552) with secure allocated, low cost, storage. ETFs take what is essentially a riskless asset and add in layers of counter-party risk (Trustees, Custodians, and many Sub-Custodians (that the Custodian does not have the right to audit)). Expect more news of issues with the paper markets and also with the Custodian for the SPDR Gold Trust GLD in 2020.
Short-term short view (not shorting), then long again.
I can't see a very good reason for a gold correction other than;
- Everything needs to correct - it's never a straight-line move,
- It is possible that big banks (possibly even the Custodians for major gold ETFs) are being forced to sell-off reserve assets to cover losses or to put aside as contingencies for what look like to be a future MAJOR banking investigation and likely hefty fines,
- The drop will get deeper due to short-term traders using excessive leverage (massive inflow in 2020 of inexperienced traders won't help).
But, its not like US government debt, the US Federal Reserve balance sheet, massive money printing, global move away from the USD, or 10 year treasury yields (0.68%) suddenly got any better - so I see no reason for me or anyone else to sell physical gold. This is just a gift to people with the ability to add to their positions really. Yes big institutions and traders will do their thing buying and selling paper gold, but you and me can buy and hold - which negates many of the advantages that major trading houses and hedge funds have over the "small guy."
But, even the small players want to know where the price drops are likely to end, so that they can add to their positions. BTFD and all that. So this is where I am targeting for my next buy, like always I don't know if I am right. So I got out my magic number 8 ball and gave it a shake.
My TA is just about looking for areas that "line up", areas that people using various methods of determining support and resistance will target. The more that line up the better.
So I looked at the 200MA (and extended it with great artistic skill and flair,
RSI - which on the daily time-frame is right on the 30 level,
support from previous recent price peaks,
Fibonacci extensions - assuming a 1:1 extension of wave C,
Fibonacci retracement, and I ended up with the blue box.
The smaller sliver blue box between 1800 - 1807 is what I am thinking as both the 1;1 extension and a 1.618 extension of what may be the start of wave C down. I will buy here and buy again if it goes lower. Now that the gold/silver ratio is above 80 again, I will also be adding to silver positions in the expectation that silver will again out-perform gold when / if the bull market continues.
If the $1800 doesn't hold then watch the 200MA / 0.5 Fib retracement and the recent price peaks to form the next area of strong support in the mid to high 1700s.
I see USD2200 as a low estimate for gold by the end of 2020. If you hold positions in bullion ETFs, seriously consider moving to using non-bank bullion vaults (like Bullionstar in Singapore bullionstar.com/?r=552) with secure allocated, low cost, storage. ETFs take what is essentially a riskless asset and add in layers of counter-party risk (Trustees, Custodians, and many Sub-Custodians (that the Custodian does not have the right to audit)). Expect more news of issues with the paper markets and also with the Custodian for the SPDR Gold Trust GLD in 2020.
Note
businessinsider.com.au/jpmorgan-pay-record-billion-spoofing-settlement-market-manipulation-investigations-sec-2020-9?r=US&IR=TRecord USD1 Billion fine for precious metals market manipulation.
Note
Ok, I think the correction is over now...Note
I have been bullish on gold since calling the bottom on gold in August 2018 to within a few dollars. But, I decided against trading short-term or with leverage. Mainly, because gold isn't a trade for me, it is way more long-term than that. Now that it has broken well above 2011 highs, I am starting to diversify into gold miners that I see as well positioned to benefit from the industry tail-winds - as they will benefit more in % terms vs the metal. The main downside to this recent strategy is that my profits will be denominated in fiat currency. But I have a plan for that.
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