Closing my Buying order over-night / #18 Profits row

8 mar 2022

As discussed throughout my yesterday's session commentary: "Market closing above #2,000.80 barrier will arise Buyers once again where #2,022.80 will be most viable Target (approaching ATH levels)."


Since lately, #3 out of #5 major moves occurred throughout Asian session, I have set my pending order on #2,000.80 break, Targeting #2,015.80 in extension. My pending order was triggered and Target was met which extended my run to #18 Profits row and #2 Stop-loss hits regarding January - March cycle. I will use this chance to congratulate Traders who followed my call and allowed additional over-night risk, well done!


Technical analysis: Important session for Gold ahead as it represents the crossroad for the Trading week, while Thursday's session contains Core CPI High impact announcement (which may heavily pressure Gold). This is Inflation data and always keep in mind Gold's use as a counter to Inflation. From a Daily chart's Technical perspective, Swing point of view on the gradual uptrend started on January #28, Gold didn't priced in aggressive correction which was expected (trapping Sellers on every High's peak), as Price-action was Buying every dip and totally ignoring Overbought conditions. Observe the February #11, February #15 Low's which were instantly Bought, aswell as the Double Bottom formation on February #24 - February #25 fractal, as current Gold's soaring is the product of it. It is important to note that yesterday's session Low's was made right near the #1,975.80 (former #13-Month High's) retracement level and Naturally, it attracted Buyers where Price-action was pushed back once again above #2,000.80 psychological barrier. This confirms my formula that Selling Gold currently is dangerous decision to make, especially with Buying pressure coming strongly from Fundamental side. No surprise then why Hourly 1 chart is Neutral most of the times, able to convert into aggressive upswing rally anytime, arising Gold's Buyers.


Fundamental analysis: Crucial fact has to be faced, Gold Price-action can be violently Volatile at the times (currently) where Prices have a High variance to be predicted with the desired precision for Investors like mining companies, Central banks, and all the speculative agents of commodity market, which makes Gold sometimes a High risk asset aswell, in other words: any prediction of it’s nominal or real Prices sometimes has a very High level of uncertainty of being even accurate. Many models for predicting gold Prices have been built including my own successful formula I have been working on for many Years. On of the Gold’s models propose linear or non-linear relationships between multiple variables and the Gold's Price-action. The fact that macro-economic cycles affect Gold's Prices is most of the times ignored by Investors (retail Traders), or partially taken into account, when this fact is of great importance in order to predict Short and Medium-term trends on Gold Prices with good accuracy, and also to understand the current circumstances about the market. The latter is supported on the fact that the Price-action of Gold relates in a direct proportional way to Gold reserves and Prices of metal products, while it relates in a converse proportional way to financial market indexes and global macro-economic indicators and oscillations / aswell on studies about potential Gold bubble Prices and financial crisis which may be ahead, by using data since #1900 to #2022 Year. As the DX and Bond Yields (along with Usd-Jpy in some cases / structure), is a financial variable that is reported Daily and affects Gold’s Price-action conversely (as direct correlating assets Traders should pay attention to).


Commentary prior to current correlation developments: As discussed, Gold’s Prices could be very Volatile to be predicted with accuracy in the Short and Medium-term; however, they behave cyclically in relation to DX and Bond Yields (in some cases, Stock markets and Usd-Jpy pair). This knowledge opens a door for better understanding the behaviour of Gold Prices in the Medium and Long-term. As Gold is a commodity, it tends to behave in a positive relation to energy Prices and in a negative relation with financial markets and macro-economic indicators. It is so, since Gold is seen as a safe-haven when hazardous times hit the global economy, and taken to a second place when the economy is doing well and thus it is more attractive to invest in companies than in Gold itself. Although the supply of Gold on the international markets is negligibly increased by small gains in production and some Central banking policies, these increases are not enough to meet the demand that has been going on since the financial crisis of #2008 (Housing collapse), resulting in a Gold deficit for covering a Stock market and macro-economic downfall that may occur. In other words, the supply of Gold, although increasing slightly in absolute terms, is generally decreasing in terms of availability in this kind of circumstances. The Gold rush then is predicted to be stronger after #2022 Year and a repetition of history would take place if that happens, that is, Gold Prices would decrease dramatically as the DX should engage a rally once when Fundamental factor (current invasion and every-growing Inflation) is off the markets and Fundamental dust settles. Investors will lose interest in Gold as a safe-have (flee to safety) asset, altering it's current High demand role.


My position: After previous order, I will await Price-action to Trade below #2,000.80 barrier, and once it is invalidated and Hourly 1 chart's candle closes above it, I will Buy Gold (with tight Stops) towards #2,022.80 once again. #2,003.80 will then be my entry point. I am still not interested in Selling Gold regarding Short-term, and will use every opportunity to Buy the Low's that Price-action delivers. If #2,022.80 variance breaks, Gold may test ATH's levels within #10 sessions.