GOLD (XAUUSD) Commodity Analysis 09/09/2021
Fundamental Analysis:
The reason why you might find fundamental analysis interesting is that it offers help in determining the long-term trend. In other words, it suggests whether the price of an asset will go up or down in the long term. Because of that, fundamental analysis is crucial when you are deciding what to do with your long-term capital.
Please note that fundamental factors (fundamentals), as a whole, do not change from one day to the next (at least not in a visible way). Instead, they tend to evolve gradually and their indications change by degrees. So, if you invest in gold, it is unlikely that the fundamental outlook will change in a day or a week. Such a shift would more likely take months or - more likely - years to materialize.
Fundamentals may change rapidly only when unexpected events of great importance take place. For example, if the U.S. defaulted on its debts, the fundamentals of gold would change almost instantaneously (in this case they would support substantial appreciation of the metal).
On Average, about 2,500 metric tons of gold get produced each year, compared to an estimated 165,000 metric tons of the entire world’s gold supply. Global mine production of gold steadily rose after the 2008 economic crisis. The production of gold was increased, from 2280 metric tons to 3000 metric tons, the U.S. production value of gold has also increased along with the gold production. China is currently leading global gold mining production at 490 metric tons in 2015, while Australia is second, producing about 300 metric tons the same year. There are different processes of mining of Gold which include placer mining, panning, sluicing, and dredging. Panning is a manual technique that uses a shallow pan filled with sand and gravel, that may also contain gold, to sort through the material.
Even though new production might seem modest compared to the total supply, production costs can influence the price of all gold in the world. When production costs rise, miners sell gold for more money to preserve their profits, and those higher costs also get reflected when it comes time to sell coins if they were mined, from gold mined yesterday or thousands of years ago.
The outlook created by the fundamental analysis of the gold market remains strong with the growing uncertainty in the world economy and rapidly expanding money supply. As governments try to cope with financial turbulence, they print more and more fiat money (money that is not backed with material assets). This fuels inflation that eats away government bonds yields. If the yields themselves are lower than the inflation, then you actually lose purchasing power by holding these bonds. In such a situation, investors switch to assets they believe will allow them to preserve their wealth. Gold is precisely one of such assets.
With the demand for gold growing both thanks to the demand for jewelry and thanks to the free exchange of information over the Internet, there is no technical possibility to satisfy the demand with both the existing and the anticipated gold supply. All of this suggests that gold is on its way up for the long term.
Technical Analysis:
as we can see the commodity is in a retracement phase after making an ATH of 2080$ Mark, now we can have some responsible short position and target them the 61.8% of the bullish waves retracement area and then have our main Long Positions Opened followed by some Scale IN and OUT Strategy from 50% to 61.8% of the same wave and target them the Specified TP levels accordingly.
The reason why you might find fundamental analysis interesting is that it offers help in determining the long-term trend. In other words, it suggests whether the price of an asset will go up or down in the long term. Because of that, fundamental analysis is crucial when you are deciding what to do with your long-term capital.
Please note that fundamental factors (fundamentals), as a whole, do not change from one day to the next (at least not in a visible way). Instead, they tend to evolve gradually and their indications change by degrees. So, if you invest in gold, it is unlikely that the fundamental outlook will change in a day or a week. Such a shift would more likely take months or - more likely - years to materialize.
Fundamentals may change rapidly only when unexpected events of great importance take place. For example, if the U.S. defaulted on its debts, the fundamentals of gold would change almost instantaneously (in this case they would support substantial appreciation of the metal).
On Average, about 2,500 metric tons of gold get produced each year, compared to an estimated 165,000 metric tons of the entire world’s gold supply. Global mine production of gold steadily rose after the 2008 economic crisis. The production of gold was increased, from 2280 metric tons to 3000 metric tons, the U.S. production value of gold has also increased along with the gold production. China is currently leading global gold mining production at 490 metric tons in 2015, while Australia is second, producing about 300 metric tons the same year. There are different processes of mining of Gold which include placer mining, panning, sluicing, and dredging. Panning is a manual technique that uses a shallow pan filled with sand and gravel, that may also contain gold, to sort through the material.
Even though new production might seem modest compared to the total supply, production costs can influence the price of all gold in the world. When production costs rise, miners sell gold for more money to preserve their profits, and those higher costs also get reflected when it comes time to sell coins if they were mined, from gold mined yesterday or thousands of years ago.
The outlook created by the fundamental analysis of the gold market remains strong with the growing uncertainty in the world economy and rapidly expanding money supply. As governments try to cope with financial turbulence, they print more and more fiat money (money that is not backed with material assets). This fuels inflation that eats away government bonds yields. If the yields themselves are lower than the inflation, then you actually lose purchasing power by holding these bonds. In such a situation, investors switch to assets they believe will allow them to preserve their wealth. Gold is precisely one of such assets.
With the demand for gold growing both thanks to the demand for jewelry and thanks to the free exchange of information over the Internet, there is no technical possibility to satisfy the demand with both the existing and the anticipated gold supply. All of this suggests that gold is on its way up for the long term.
Technical Analysis:
as we can see the commodity is in a retracement phase after making an ATH of 2080$ Mark, now we can have some responsible short position and target them the 61.8% of the bullish waves retracement area and then have our main Long Positions Opened followed by some Scale IN and OUT Strategy from 50% to 61.8% of the same wave and target them the Specified TP levels accordingly.
