A very good time to update the Gold chart after clearing inflation and FOMC yesterday. As widely mentioned in the latest macro update in the institutional room:
"Here tracking for a slight uptick in inflation [check] but nothing out of trend before the spotlight is turned onto forward guidance with Fed and 2020 dots. I expect the dots to tick down whilst leaving 2021 hikes on the table [check]."
Inflation making a return while risk markets remain less sanguine with protectionism, impeachment, election risk and late cycle fears refusing to abate. To understand how and why we are trading the current 1475 level its important to review and dig deeper into the chart archives, this entire 5 wave impulsive sequence began from the breakout we traded live here at 1200:
At this point after the breakout it was clear the large triangle formation was in play, for those with an understanding of waves this is a textbook case of an ABCDE pattern to mark the final chapters of the cycle:
...for those wondering if we also traded pullbacks in the opposite direction, the answer is yes:
Now that we have reviewed the flows to date and have an understanding of the why and how, we can start to build a case for adding to our longs. It should be no surprise that this valuation driven pullback attracted buying interest from the usual suspects:
It is the same story in particular for those trading XAU versus CNY:
In this regard, Gold reiterated the skew towards grinding higher at least for the next year. It appears unlikely that the bar for risk-on will be met by the end of 2020, with Brexit and US elections entering into the picture it is certainly more conceivable that further upside could play out in a way that triggers momentum towards 1650 targets.
Thanks for keeping the support coming with likes and jumping into the comments with your questions and charts!
Like your analysis! I have very similar support as you do, only I used Volume Profile to find it.
Actualy mine is just bit lower. Check it out:
Antonio_trader
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Looks really good! Expecting that if the tariff deal with US and China does not happen by December 15, then it could trigger market sell and gold will spike on that. Yesterday FED already signalled a slowdown with no hikes next year. Thanks for sharing!
Actualy mine is just bit lower. Check it out: