Gold GC1 - A New ATH is Simply a Fantasy. But, a Big Trade Brews
Updated
is this thing that has traded like a boat anchor, as much of a boat anchor as Bitcoin . More or less not moving at all. Yet, as with all things, consolidation periods only last for so long before the volatility picks up again to draw in new attention.
This chart is a huge amount of time and very wide ranges and so it's very hard to stuff the important info into the part associated with this call. You'll have to read my wall of text for it to all make sense.
Many have wondered, myself included, how Gold could have failed to make a new high during its post-Russian Federation invasion of Ukraine pump to $2078. I myself traded this during that time and had months worth of longs established at $1,600, $1,700, $1,800 and missed the chance to get out at a profit, waiting for it to set a new high.
I was very confused.
Over the months, I have upgraded myself significantly and I now understand why. It's simple:
Market makers were simply attacking the area above the '11 $1,923 ATH. The fact that no new high was made indicates that MMs are heavy on the sell. Unfortunately for goldbugs, this means that a new all time high is literally a fantasy. It will happen, but not until significant downside conditions are met.
The total range equilibrium between the $1,069 low in '16 and the post-COVID ATH is roughly $1,550. Until gold trades below this area and there are indications longs are accumulating, there will not be a move towards an ATH again.
This can be seen with a study of the monthly:
And the Weekly:
This is reality. Just get in line with reality and you'll be able to:
a) Save losses
b) Book gains
Gold has traded, since September, underneath a key low, and has not followed its counterpart Silver in taking significant north-side runs. Today during FOMC madness, the one time that gold really ought to have gone up to draw in buyers based on the notion of inflation hedging, it instead ran into resistance at that $1,670 level.
This mostly assures that gold is headed to new lows.
In my opinion, there are two scenarios, the first is much more likely than the second, and bodes well for bulls:
1) Gold trades to the low $1,500s for a discount versus the COVID-hysteria lows for the first time in almost two years.
Should it show signs of life here, Gold should reverse and head back into the $1,850-$1,900 area. But be warned this type of trading pattern will not amount to a run towards a new all time high, although it will feel like it, and all the "gurus" will assure you it will be.
This type of trading pattern will constitute more selling, because a longer term move downwards is happening.
2) Gold loses all life and heads towards the $1,350 area. This will be long term bullish because, after what is likely to be at least a year of accumulation, it means that a new all time high is inbound.
I believe gold will drop as equities rally more. I think that when equities start to dump, this time gold will go up, because it will drag in goldbugs and ancap types who think the dollar is on the way out and the gold standard is coming back.
After you buy their bags at $1,900, gold will be crushed and you'll buy high and sell back low.
Note that in terms of Commitments of Traders , although commercials are their most long they've been in three years, they're still not net long. You won't see them be net long until the $1,300s.
But before then, we should see Gold mimic the patterns of silver , because more selling is in store.
A final word: The biggest market risk right now is not the Federal Reserve , or a recession. Neither is it Credit Suisse collapsing. A lot of things are going to go up, and may even go up a lot (Don't believe it? Take a look at what the Dow Jones just did. Some components made a new all time high in the middle of your "Hawkish Federal Reserve" and your "recession.").
The greatest market risk is that the Chinese Communist Party will either collapse internally or be thrown away by "Emperor" Xi Jinping as he, and the nation of China, struggle to survive what is happening.
When that day happens, 20% days down on the indexes are going to come and there won't be any bounces.
Wall Street won't be in such a mood to market make anymore, because all their collusion with the Chinese Communist Party and their implicit passive and active support of the organ harvesting persecution of Falun Gong will have many of their members scuttle into hiding.
Just wait and see. Nobody thought the USSR would ever fall, and yet, it did. Overnight.
Tl; dr Gold --> $1,500 with little upside in between. This is a bear trap.
Then big bounce to $1,850. But the big bounce is a bull trap.
This chart is a huge amount of time and very wide ranges and so it's very hard to stuff the important info into the part associated with this call. You'll have to read my wall of text for it to all make sense.
Many have wondered, myself included, how Gold could have failed to make a new high during its post-Russian Federation invasion of Ukraine pump to $2078. I myself traded this during that time and had months worth of longs established at $1,600, $1,700, $1,800 and missed the chance to get out at a profit, waiting for it to set a new high.
I was very confused.
Over the months, I have upgraded myself significantly and I now understand why. It's simple:
Market makers were simply attacking the area above the '11 $1,923 ATH. The fact that no new high was made indicates that MMs are heavy on the sell. Unfortunately for goldbugs, this means that a new all time high is literally a fantasy. It will happen, but not until significant downside conditions are met.
The total range equilibrium between the $1,069 low in '16 and the post-COVID ATH is roughly $1,550. Until gold trades below this area and there are indications longs are accumulating, there will not be a move towards an ATH again.
This can be seen with a study of the monthly:
And the Weekly:
This is reality. Just get in line with reality and you'll be able to:
a) Save losses
b) Book gains
Gold has traded, since September, underneath a key low, and has not followed its counterpart Silver in taking significant north-side runs. Today during FOMC madness, the one time that gold really ought to have gone up to draw in buyers based on the notion of inflation hedging, it instead ran into resistance at that $1,670 level.
This mostly assures that gold is headed to new lows.
In my opinion, there are two scenarios, the first is much more likely than the second, and bodes well for bulls:
1) Gold trades to the low $1,500s for a discount versus the COVID-hysteria lows for the first time in almost two years.
Should it show signs of life here, Gold should reverse and head back into the $1,850-$1,900 area. But be warned this type of trading pattern will not amount to a run towards a new all time high, although it will feel like it, and all the "gurus" will assure you it will be.
This type of trading pattern will constitute more selling, because a longer term move downwards is happening.
2) Gold loses all life and heads towards the $1,350 area. This will be long term bullish because, after what is likely to be at least a year of accumulation, it means that a new all time high is inbound.
I believe gold will drop as equities rally more. I think that when equities start to dump, this time gold will go up, because it will drag in goldbugs and ancap types who think the dollar is on the way out and the gold standard is coming back.
After you buy their bags at $1,900, gold will be crushed and you'll buy high and sell back low.
Note that in terms of Commitments of Traders , although commercials are their most long they've been in three years, they're still not net long. You won't see them be net long until the $1,300s.
But before then, we should see Gold mimic the patterns of silver , because more selling is in store.
A final word: The biggest market risk right now is not the Federal Reserve , or a recession. Neither is it Credit Suisse collapsing. A lot of things are going to go up, and may even go up a lot (Don't believe it? Take a look at what the Dow Jones just did. Some components made a new all time high in the middle of your "Hawkish Federal Reserve" and your "recession.").
The greatest market risk is that the Chinese Communist Party will either collapse internally or be thrown away by "Emperor" Xi Jinping as he, and the nation of China, struggle to survive what is happening.
When that day happens, 20% days down on the indexes are going to come and there won't be any bounces.
Wall Street won't be in such a mood to market make anymore, because all their collusion with the Chinese Communist Party and their implicit passive and active support of the organ harvesting persecution of Falun Gong will have many of their members scuttle into hiding.
Just wait and see. Nobody thought the USSR would ever fall, and yet, it did. Overnight.
Tl; dr Gold --> $1,500 with little upside in between. This is a bear trap.
Then big bounce to $1,850. But the big bounce is a bull trap.
Note
Gold dumped under its lows as I anticipated but unfortunately (fortunately if you can switch gears!) it looks like it was just a major stop sweep with a reversal brewing:So where's the upside objective? Imo, looks like $1,700 and I wouldn't be surprised if it comes fast:
The best part is it gives you a fatter short to $1,500.
Note
I think gold is due for $1,700, especially in light of how it's been lagging silver.But re silver, I called this a few days ago when Zerohedge was advertising for an APMEX bullion buyback program under the guise of an article about a bullion buyback program.
"In before silver to $23."
Note
I'm still of the opinion that silver isn't going much of anywhere beyond where it is. Primarily because silver has been lively and bouncy for months already while gold has been a total brick.However, with gold, especially if we really are going to the $1,500s, I actually believe this rally has legs.
All these months since the $2,075 wick, gold has continuously fallen and never taken out a monthly high. Except for in July, when it opened strong, fell all month, and then the beginning of August took out July's high by $9.
Thus, I think that the MMs will take out both the October and September highs.
Probably target for this upwards run is like $1,789. Just don't get trapped thinking "reversal."
It might reversal. But, I think it goes up for the purpose of pushing out large short positions.
Note
Today's big candle seems to indicate $1,757~ is incoming. Hard to say if it will keep going after that. Decent opportunity to go short over the highs though.I was wrong about silver only having $20.80 in it. Silver may have as much as $23.50 in it with the way it's trading.
Note
Right now, I don't think gold is going to take out the October or September highs.Primarily because on shorter time frames the price action that makes this daily pivot looking candle is looking like distribution after the run upwards was nuked.
If the top is lower highs then $1,550 is coming and will represent a buying opportunity.
Note
Seems I had too little faith in the effect the CPI moon candle that I knew was happening and called would come on Twitter for the last 5 days, much to the winter of discontent of my bear friends, on the price of gold.A scenario that I have been calling for since August is:
1. Tech stocks go nuts
2. Oil and Natural Gas dump
3. Defense contractors dump
4. Gold and silver dump
As a very danger very bearish continuation of what's going on.
Considering that the energy bull market has been broken and that the Dow trades a much different pattern than the Nasdaq and SPX at this point, we may really see this unfold.
Let things cool down but puts are probably better than calls on Gold.
Note
Here's gold on the 15 minute with the red and orange lines being previous monthly highs. Considering gold only very briefly wicked the bottoms, I have strong reservations the intention is to take out more monthly highs.
Bulls have already had a nice meal and shouldn't be too greedy.
Note
Gold and oil pumped on the back of a false flag that Russia hit Poland with missiles and it's going to lead to an escalation. It's not. Market cycles and timing do not indicate that, nor is it in Russia-China's interests.
Once the air gets cleared there's a very high chance gold corrects.
Note
Gold has finally returned to what I regard as a "poison gap" Generally speaking bullish price action would have rebalanced that gap long before 10 days has passed.
A return to the lows may come rather quickly.
Note
This "poison gap" theory appears to really be playing out:What you want to see with these big gaps is that they get wicked into early on in the trading range and then quickly traded away from.
Spending two days inside the gap with no luft is a big big red flag.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.