XAUUSD Bullish (11/05/2023 to 11/10/2023 prediction)
Updated
In the higher timeframe, we are still in a bullish structure so we will look for buys for intra-day swing setups as the price never closed in the 1962 - 1953 range or below. It may give us some valid sells, but I would feel a lot more comfortable rejecting the 2010 key level before thinking anything intraday at that point. I am nowhere near comfortable in the middle of the range where we are or trying to guess the price drop below 1970 without major catalysts affecting price. With that being said, we also did not create any new highs. We are in a consolidation zone as we gather orders for the next breakout. It wouldn’t be too unusual to slowly make our way to the top of the range if no new catalysts happen as we are light on news this week.
Due to lingering war tensions all over the world, doveish federal reserve sentiment lingering from last week, and a softening economy from lagging increase of interest rates and a shady banking industry that may see some failures soon, it will be hard to say with some confidence so see Gold Bears really gain momentum with full force. Those are strong fundamentals that will be lingering for months. We need to see a major catalyst to really see Gold drop. There is a very high chance we will create all-time highs within the next six months. We could see some retracement to 1980-1975, but we will still look for buys as we haven’t broken the bullish market structure on the higher time frame.
We have a light week with economic news with mostly fed speakers, including Jerome Powell, who speaks on Tuesday and Wednesday. Initial jobless claims are coming out on Thursday, and we expect 215K first-time people filing for their state’s unemployment insurance. Last month was 217K, so we are actually expecting fewer people to file for the insurance. After last week and the reports showing the economy softening a bit faster than expected, it is hard to see that number respected. If it comes out way higher, dollar bears will kick in. Dollar bulls if it comes out way lower as that will indicate there is still too much steam in the economy. If it comes out as expected, expect nothing to happen as it will likely already be priced in.
We close the week with Michigan Consumer Sentiment and 5-year consumer inflation expectations. Not heavy reports to affect price but it is good to know how the customers feel as they were taken 2 days before. I expect their reactions to be neutral to negative and a bit lagging as credit cards have been going up while retail sales have stayed the same. The reports indicate that the covid stimulus money will be spent by the end of Nov 2023 with payments on mortgages and student loans expected to start back up. December 2023 may be a blood bath, which will be starting in 2024 on a really bad note. For the smaller banks, commercial properties and auto loans are the things I am looking at going forward in the future
Trade Idea 1: We see price go bullish and slowly make it’s way up to the 2005 area. That will confirm bulls as that will have made a new high. We could see 2010 by the end of the week, maybe 2020 if fed turns hawkish or new fundamentals.
Trade Idea 2: We continue our bear pressure from the start of the week and retest lower levels of 1976. We start going lower and Bullish bias is in jeopardy. I expect a retest and slowly make it’s way back up to 1997… maybe 2010.
Trade Idea 3: We start off with the same as Idea 1 but instead of breaking higher from the wedge, we break lower to test 1981 level before bulls taking over.
Due to lingering war tensions all over the world, doveish federal reserve sentiment lingering from last week, and a softening economy from lagging increase of interest rates and a shady banking industry that may see some failures soon, it will be hard to say with some confidence so see Gold Bears really gain momentum with full force. Those are strong fundamentals that will be lingering for months. We need to see a major catalyst to really see Gold drop. There is a very high chance we will create all-time highs within the next six months. We could see some retracement to 1980-1975, but we will still look for buys as we haven’t broken the bullish market structure on the higher time frame.
We have a light week with economic news with mostly fed speakers, including Jerome Powell, who speaks on Tuesday and Wednesday. Initial jobless claims are coming out on Thursday, and we expect 215K first-time people filing for their state’s unemployment insurance. Last month was 217K, so we are actually expecting fewer people to file for the insurance. After last week and the reports showing the economy softening a bit faster than expected, it is hard to see that number respected. If it comes out way higher, dollar bears will kick in. Dollar bulls if it comes out way lower as that will indicate there is still too much steam in the economy. If it comes out as expected, expect nothing to happen as it will likely already be priced in.
We close the week with Michigan Consumer Sentiment and 5-year consumer inflation expectations. Not heavy reports to affect price but it is good to know how the customers feel as they were taken 2 days before. I expect their reactions to be neutral to negative and a bit lagging as credit cards have been going up while retail sales have stayed the same. The reports indicate that the covid stimulus money will be spent by the end of Nov 2023 with payments on mortgages and student loans expected to start back up. December 2023 may be a blood bath, which will be starting in 2024 on a really bad note. For the smaller banks, commercial properties and auto loans are the things I am looking at going forward in the future
Trade Idea 1: We see price go bullish and slowly make it’s way up to the 2005 area. That will confirm bulls as that will have made a new high. We could see 2010 by the end of the week, maybe 2020 if fed turns hawkish or new fundamentals.
Trade Idea 2: We continue our bear pressure from the start of the week and retest lower levels of 1976. We start going lower and Bullish bias is in jeopardy. I expect a retest and slowly make it’s way back up to 1997… maybe 2010.
Trade Idea 3: We start off with the same as Idea 1 but instead of breaking higher from the wedge, we break lower to test 1981 level before bulls taking over.
Note
War tensions:The Israel-Gaza war is now contained to Israel only. As long as the fighting is contained there, we will not see any significant movement affecting gold. Major peace initiations such as a ceasefire, a substantial long-term humanitarian pause, or an end to the war will be de-escalating factors. If another country enters the war or the international community actually punishes Israel or the West by blocking oil or escalating the war crimes to the ICC (which the US and Israel are not a part of), will we see a major gold bullish catalyst take hold.
The Russia-Ukraine war is coming to an end. The West is fed up spending billions to fight the Russians only for them to have nothing to show as the Russian economy is booming 2.8% this year. Not only did the Russians pick up production of all aspects of their economy, including the military, but they also managed to evade the West sanctions, capping Russian Oil at $60 a barrel. China, India, and Iran are the major accomplices in supporting Russia during its transition, buying Russian oil and then selling it to the West. After Israel supported Ukraine in the war, Russia has no love lost supporting the Iranians and the Iranian back groups all over the Middle East as a thank you. Europe is now panicking with the Israel-Palestine conflict, it is taking priority to the Americans and Ukraine no longer has free American money to protect Europe from the Russians. Maybe now they will pay for their own defense and stop relying on the US for that.
There are two big showdowns we should expect to see in the coming months. The first is the Europeans attempting to force Ukraine into a peace deal where Ukraine will lose territory. The Ukrainians vehemently reject this, but with the corruption, lack of supplies, lack of manpower, and a lack of international support, they don’t really have much leverage. The Europeans at the end of the day have no interest in fighting this war as they are the ones paying for it with high gas bills. The Europeans learned that they couldn’t fight with the country that is selling them oil. At the end of the day, they still need to buy oil while Russia doesn’t need to sell it to them.
The second showdown I am watching will be between the European Union and The European Central Bank. The European Union seized a bunch of Russian money at the start of the war and has refrained from delivering it to the Russians. This in itself is frustrating, but it isn’t the end of the world as this is solely a commercial dispute. The issue comes now with what the EU wants to do with that money. Some members are asking to invest it and give the proceeds to the Russians as the American free check is now ending. They want to use the Russian money to fight against Russia in the war. Russia said that was a red line, and the ECB knows that that would be a horrible idea. The ECB fears there will be high inflation as the world will start to ditch their Euros and move their money to a safe haven (USD or XAU). That then will cause other countries not to do business with the Europeans, taking their import and exports to levels that we haven’t seen in a long time. The Europeans are already in a recession and don’t need massive international incidents damning the rest of the continent which is also divided on the war. Trust is low and will be broken if that plan is initiated.
Note
Taiwan:Things are tense over the Taiwan Strait. Over the last week, 107 Chinese Air Force Planes entered Taiwan’s airspace. One US Destroyer and a Canadian Frigate transited to Taiwan Strait on Nov 1st. China’s No.2 military chief says “We should attach importance to and consider the security and legitimate concerns of all countries, not impose our will on others” which is ironic but okay. Regardless, China is doing drills over Taiwan for one would assume a future conflict they are preparing for. It is silly that the West is only sending two ships, which makes me think the US cannot have 3 open fronts in different regions of the world… and it looks like China knows it too. I would not be surprised by a Taiwanese invasion within the next 12 months as the intensity of the drills is increasing, and the only major obstacle is busy and almost broke. The only thing I suspect is introducing any restraint to the Chinese is the fact of the diplomatic mess they will find themselves in if they take Taiwan by force. It would also ruin their image as they will now be seen as any other imperialist nation that the world has seen before.
Turkyie:
Turkyie is making waves in the Western world that are frightening many Western leaders. Since the fall of the Ottoman empire, Turkyie has seen the Middle East ravaged over and over again as they sat quietly to try and quell their religious fundamentalist from rioting or taking over and ruining Turkyie’s chance of becoming Westernized and Europenized. After the fall of the Soviet Union and the shenanigans, the Europeans and Americans partook in since the 90’s basically killed Turkyie’s appetite to join said block. Especially repeated insults about the Kurdish question that still cause major discomfort for the Turkish but also the Iranians, Iraqis, and Syrians. All that has started to change with the Iraq war and with Turkyie surviving a coup that they suspected the Americans and Europeans provoked being the final nail.
With Tayyip Erdogan winning the election earlier this year, religious fundamentalists now have majority power in Turkyie as he relied on them for his victory. The Isreal Gaza war really showed the world how united the country is and that has emboldened him to be more forceful on the international stage on a more nationalistic front, a more Ottoman front. People forget that the Arabs backstabbed the Turks to help topple their empire during WW2. They didn’t lose the Middle East because they weren’t ready for war; they lost the Middle East because they got attacked from the inside out. Given this is a very short nutshell history neglecting the Ottomans being completely spread thin and finances shady, that fateful event was enough to turn the tide. The Arabs pretty much regretted it ever since as the West screwed them and gave them Israel as a thank you. 75 years later, if the Turks don’t hold grudges, they will have a super strong dedicated ally going forward. The Middle East is completely different from the 1940s, 1970s, or even the 1990s. Most people were uneducated and poor… that isn’t the same now with almost every country in the Middle East more or less educated and literate. Plus Social Media. People are considerably smarter than they were in the past.
Let’s not forget that because of being in the West, Turkyie has a very very strong military force. It has a long history of imperialistic conquest and has a lot of officer programs that keep its military in check. It is nothing like the US and Israel but considerably stronger than any other military in the region. Iran may come a close second, I’m not too familiar with all of Iranian military might. The US and Israel only win when they have the technological advantage. You take that away, and you get a long, protracted war that is expensive in both coin and blood (Like Ukraine and with the West's help. Without it, the war would have been over in a month). A high-tech military fighting and an almost equal army with a population considerably larger and closer is not a gamble I will be comfortable taking. The West's best heed, Erdogan when he says the conflict will expand if Israel is not stopped, it would be unwise to call it a bluff.
Note
**The issue comes now with what the EU wants to do with that money. Some members are asking to invest it and give the proceeds to the Russians as the American free check is now ending.**For the first update, I made a mistake, and I can not edit it anymore.
The EU wants to invest Russian seized monies and give the investment profits to Ukraine to fight the Russians. My apologies for the confusion.
Order cancelled
Trade Idea Invalidated. We are now firmly in bearish territory.J Powell gave no comments today, resulting in continuation moves to the downside.
We are approaching the 1950s, and if things remain this quiet and uneventful, we can see the price break the 1950s and go down to 1910 at least, as that would be the 50% of the war tension flaring up one month ago.
We could see a bounce in the 1950s range, although entering a trade will be high risk as the momentum has shifted and the market is exhausted.
Order cancelled
It was a pretty quite week and no new escalations that would have an impact on the price
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