GOLD's long-term bearish scenario!
Updated
This may seem a little radical! But first let us review what brought #Gold here. This my analysis of gold when it was ~ 1400$:
That was clear that risk will push gold higher and now we reached to the target area. Albeit we had first agreement between US-China meanwhile, but on the other hand Covid-19 came into play and it even worsened their relation too. Anyway, now market seems a little baffled about whether is there any more demand left to push it higher? My answer is it doesn’t seem so.
The fact is that Gold will reach higher as the long-term concerns about economical risks gets higher. There’s a point where no more new concerns come in and market becomes over-buy. Now as the concerns about long-term effects of the virus pandemic is getting lower gradually, it’s rational to think we would gradually come back to where we were in Jan, 1500$-1600$ zone. As you can see in the chart this zone is the target for two harmonics that formed recently. So, it seems that FA and TA may be consistent here. Reaching to the next bearish target needs more risk to be faded away in economic and political spheres.
Now IGN sentiment indicator says that 79% of the traders are net long and open interests are declining. This is fragile and price actions could help us see if they’re really selling at the top. One significant sign would be stable price below previous ATH (that was ~1921$). Another is high volumes in this zone we are in, that almost is the case as you can see volumes are relatively high here.
The two harmonic patterns are the Shark and Alt-Bat. Technically speaking gold behaves very harmonic imo. But this is a monthly chart and it’s very challenging. They may become invalid quickly if price continue to go higher and become stable above last ATH.
This chart is the vision of my own algorithm in monthly TF:
Targets are consistent in my own algo too but still got no bearish signal on price action. But one or two more bearish candle would do so. VP is also consistent with harmonic and fundamental target. So, all it needs is significant selling pressure. For those who trade big or with low or no leverage, R/R ratio is great. But this is not a trade advise and I recommend to do your own research. There’re bullish scenarios that I didn’t talk about here.
I’ll try to update this idea with my own algorithm signals.
Have best trades.
That was clear that risk will push gold higher and now we reached to the target area. Albeit we had first agreement between US-China meanwhile, but on the other hand Covid-19 came into play and it even worsened their relation too. Anyway, now market seems a little baffled about whether is there any more demand left to push it higher? My answer is it doesn’t seem so.
The fact is that Gold will reach higher as the long-term concerns about economical risks gets higher. There’s a point where no more new concerns come in and market becomes over-buy. Now as the concerns about long-term effects of the virus pandemic is getting lower gradually, it’s rational to think we would gradually come back to where we were in Jan, 1500$-1600$ zone. As you can see in the chart this zone is the target for two harmonics that formed recently. So, it seems that FA and TA may be consistent here. Reaching to the next bearish target needs more risk to be faded away in economic and political spheres.
Now IGN sentiment indicator says that 79% of the traders are net long and open interests are declining. This is fragile and price actions could help us see if they’re really selling at the top. One significant sign would be stable price below previous ATH (that was ~1921$). Another is high volumes in this zone we are in, that almost is the case as you can see volumes are relatively high here.
The two harmonic patterns are the Shark and Alt-Bat. Technically speaking gold behaves very harmonic imo. But this is a monthly chart and it’s very challenging. They may become invalid quickly if price continue to go higher and become stable above last ATH.
This chart is the vision of my own algorithm in monthly TF:
Targets are consistent in my own algo too but still got no bearish signal on price action. But one or two more bearish candle would do so. VP is also consistent with harmonic and fundamental target. So, all it needs is significant selling pressure. For those who trade big or with low or no leverage, R/R ratio is great. But this is not a trade advise and I recommend to do your own research. There’re bullish scenarios that I didn’t talk about here.
I’ll try to update this idea with my own algorithm signals.
Have best trades.
Note
This chart is weeklyNew resistant formed at the ATH where I pointed with green arrow.
It's interesting to know that this line (every color is related to different buy and sell pressure) formed once in Dec 2011 and after that price declined from 1750$ to 1050$ in Dec 2015! 4 years and 40% drop. This line is a sign of serious over-buy zone. Lets see what happens.
Note
Weekly updatePerfect! the MPC line perfectly suggested resistant in the top!
Overall is bearish, also highly possible bullish correction imo.
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