Yesterday's price action after the announcement after the vaccine announcement removes a major bull support from the market. This has lead to a higher risk appetite as could be seen by rising treasury yields (postive for USD) and share markets. Currently the hope of a stimulus is the only thing holding gold up and this may be delayed (with Trump more focussed on the count) until Biden assumes control and even then we may see a stimulus figure nowhere near expectations given the Republican senate majority. My advice would be sell on rise until 1975 and if gold closes below 1850 we may see a dive in gold prices.
PS: the 1800 price level targeted by bears was pre-vaccine so we may see a break below that.
PS: the 1800 price level targeted by bears was pre-vaccine so we may see a break below that.
Trade active:
Even though trading has been range bound, the fundamentals are slightly bearish. An indicator for this is that inspite of DXY trending lower, gold has not shown any strength whereas they generally tend to be negatively correlated. This indicates that risk appetite is increasing as the big money is rebalancing to risk from safe havens. For bulls 1900 is acting as a major resistance and 1865 is the support for bears.
Trade active:
My premise continues to hold true. DXY is making new lows but gold is finding minimal support from it. Something to think about if DXY bounces from here (near major support at 92) what will happen to gold.
However please be careful, this is the current scenario and is not valid for the long term as central banks intend to keep interest rates low and are targetting higher inflation rates. This is generally bullish for gold so stops are a must.
However please be careful, this is the current scenario and is not valid for the long term as central banks intend to keep interest rates low and are targetting higher inflation rates. This is generally bullish for gold so stops are a must.
Trade active:
As previously said Gold bulls were finding support in the form of falling DXY and as soon as DXY jumped, Gold crashed. Today DXY is again providing support (little as it is) but the market continues to be bearish. Targets are 1800 (200 DEMA) and 1782 (July open price). Depending on market conditions the TP could also be entry points for longs but avoid buying at these levels without observing market conditions.
Trade closed: target reached:
Gold has reached my target but its not all roses for it yet based on the fact that after touching its low at 1775, buying had no volume. I expect a temporary retracement to the 1803 levels which could be another short opportunity as Gold could retest July lows at 1756.
In the medium term I expect Gold to find its bottom in Dec followed by a consolidation phase (a v shaped recovery is difficult). This excludes the possibilty of any news which could trigger Gold in any direction.
In the medium term I expect Gold to find its bottom in Dec followed by a consolidation phase (a v shaped recovery is difficult). This excludes the possibilty of any news which could trigger Gold in any direction.