Gold bulls' revenge will be sweet (Update 4)
Hello traders and welcome to the August NFP-week. It promises to be a volatile one. In a word, the Oxford English Dictionary defines "august" as "impressive": as has historically been the month of August for Gold.
Last Saturday the Chinese PMI fell below 50.5, the lowest reading since the COVID-outbreak of February 2020. They say China is the factory of the world, and the reading is not a contraction but clearly the 2nd biggest world economy is slowing down. Next to this the US PMI released yesterday missed forecasts and came in at 59.5. The US10Y yields made a fresh move lower this week and closed the day below 1.18 yesterday. These are all worrying signs for gold bears.
Currently gold is being twisted and turned, pushed and pulled between two main fundamentals. First of all, the skyrocketing inflation and the slowing down of the economy. On the other hand the risk-on mood in equities is making gold unattractive for investors and traders to enter the goldmarket and some Hawkish FOMC members are spilling the beans for gold by their comments in the media. Everytime gold makes a nice bullish move, some FOMC member comes and spoils the bullish party, which makes investors wary of holding positions. The volumes are declining, positions are being closed (COT-report showed longs & shorts closed last week).
Last week we had an impulse breakout move from 1790-1833 thanks to Uncle Powell, but gold lost most of its gains on the last day of the month. This was triggered by end of month outflows and remarks by other FOMC members that tapering should start asap this year. Nevertheless, gold remains supported by 1805 and we closed the week&month above all main H4 moving averages.
Bulls entered the ring again from the golden fibo (0.382) on Monday and closed the day above the daily 21 EMA. Also we have a full house golden cross on H1, H4, Daily, Weekly & Monthly timeframe now. All these timeframes are operating in a golden cross formation currently, which strengthens my bullish view. The double top on 1833 is worrying from a technical point of view, and this needs to be taken out by the gold bulls for bigger bulls entering the market.
As I mentioned in my previous weekly view, the NFP should be the bullish trigger for gold, until that time we remain rangebound with a bullish undertone and I expect gold to reach 1845 (and if we are lucky 1860) by end of this week. As long as the bull channel holds (which the lower band is around 1799 now) I remain bullish on gold and I will be buying dips.
Love and hugs,
Cesaro
Last Saturday the Chinese PMI fell below 50.5, the lowest reading since the COVID-outbreak of February 2020. They say China is the factory of the world, and the reading is not a contraction but clearly the 2nd biggest world economy is slowing down. Next to this the US PMI released yesterday missed forecasts and came in at 59.5. The US10Y yields made a fresh move lower this week and closed the day below 1.18 yesterday. These are all worrying signs for gold bears.
Currently gold is being twisted and turned, pushed and pulled between two main fundamentals. First of all, the skyrocketing inflation and the slowing down of the economy. On the other hand the risk-on mood in equities is making gold unattractive for investors and traders to enter the goldmarket and some Hawkish FOMC members are spilling the beans for gold by their comments in the media. Everytime gold makes a nice bullish move, some FOMC member comes and spoils the bullish party, which makes investors wary of holding positions. The volumes are declining, positions are being closed (COT-report showed longs & shorts closed last week).
Last week we had an impulse breakout move from 1790-1833 thanks to Uncle Powell, but gold lost most of its gains on the last day of the month. This was triggered by end of month outflows and remarks by other FOMC members that tapering should start asap this year. Nevertheless, gold remains supported by 1805 and we closed the week&month above all main H4 moving averages.
Bulls entered the ring again from the golden fibo (0.382) on Monday and closed the day above the daily 21 EMA. Also we have a full house golden cross on H1, H4, Daily, Weekly & Monthly timeframe now. All these timeframes are operating in a golden cross formation currently, which strengthens my bullish view. The double top on 1833 is worrying from a technical point of view, and this needs to be taken out by the gold bulls for bigger bulls entering the market.
As I mentioned in my previous weekly view, the NFP should be the bullish trigger for gold, until that time we remain rangebound with a bullish undertone and I expect gold to reach 1845 (and if we are lucky 1860) by end of this week. As long as the bull channel holds (which the lower band is around 1799 now) I remain bullish on gold and I will be buying dips.
Love and hugs,
Cesaro
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