⭐️ The gold rush begins... now!
Gold is very strongly correlated with 10-year US bonds TVC:US10Y , such a high correlation there began immediately after the 2008 crisis (coincidence?). This next year, 10-year yields are unlikely to go above 5.5%, which means the potential for gold to fall is very limited.
Now the yield on 10-year bonds is 4.74% and only +~0.7% is left to reach the 5.5% mark.
In this case, gold has the potential to fall by another -7.5-10% from the current ones, that is, in theory, the price of gold will find its mid- and long-term bottom at $1,700-1,750.
🔥 What does the technical analysis say?
On the weekly timeframe, gold entered the oversold zone according to indicators. Historically, from such levels, this asset bounced upward.
On the daily timeframe the situation is even more interesting.
CAPITALCOM:GOLD Gold has gone into a very oversold zone, and the last time the indicator had such values was 7 years ago!
Also, the price is at the lower border of the medium-term downward channel, the support level of 1831 points and the long-term moving average MA200w.
The technique suggests at least a technical rebound on which you can make money.
In this case, the minimum growth target will be in the area of 1887-1900 points.
📊 Result:
The most liquid asset in the world is in a very strongly oversold zone, and if we are not at the bottom now, then the bottom is clearly very close, so at current prices you can buy both speculatively and long-term.
But you need to be prepared to buy additional assets in the area of 1700-1750 points (potential drawdown of only -3.3%).
💡 Idea: long gold with leverage up to 20x.
In this case, the stop should be placed at 1790 (-1.65%) points, and the take profit in the area of 1887-1900 (+4.11%) points.
⚖️ Risk/profit: ~1k4.
