Gold for April & Beyond..

[Guest Condor]

reckon the tramline is/has broken?  the FED minutes on June rate possibility has done it for USD strength. So now hoping new trend down to my buy zone...we'll see. C



 

[Mercury]

Couldn't agree more with your principle of looking at alternative scenarios  and I also have a similar one to the Saxo chart you posted.  On my Daily chart I have captured the scenario  was proposing and it is credible but only if the market has made a clear end to the rally and that isn't clear to me.  What if there is still a leg up to go?  In such a scenario a classic A-B-C retrace is forming that is not yet complete.  There are 2 support zones that could supply the Wave C end: 1 we are just at and another below.  Now if you superimpose that tramline pair (pink on my second 4 hour chart) it intersects with the congestion zone and the Fib 62% line.  That would be a place to go Long with close stops for me.

 



[Guest Condor]

it's v.interesting how this Gold Price action is developing .  My buy zone is perhaps an optimistic retrace of the gains made.  Of course watching as we go the price action and indicators may cause me to revise the level at which I get Long again (currently Flat).  It's good to knock this about with you & get a better result as the outcome of the discussion.  This is where the community is really helping.  Thanks C

[Mercury]

Totally agree  that is the best use we can all get from this forum but we need more contributors to share their analysis and views (inc justification) to get broader diversity of opinion and options, accepting that day traders will not find as much value from long term traders views and vice versa (not no value just not as much - I love to hear what day traders think will happen or is happening on any given day).

 

Re Gold, the jury isn't in yet and either scenario we have been discussing is still in play, although at present the bounce of support could have been at a wave C and price action seems a bit more positive.  I'd be minded to have patience on this one and wait for a confirmation move before seeking a way in.

[Mercury]

So  you are in the market or waiting for it to show its hand?

[Mercury]

I hear ya  I suspect many people are look at charts that used to be well behaved but aren't anymore.  Sign that the trend has changed and so has the wind?

[Guest Condor]

Gold still making its way down.. ABC correction altho maybe not where I placed my labels ... still tracking for the end of the retrace.  Expect that will come when the stock markets get a jolt..wonder if the bank being closed in Singapore could be the start of something. C



[Mercury]

We are at buy zone for me, decent A-B-C retrace with Pos Mom Div and RSI oversold.  I'd go long here with close stops because if it fails there there is not much between here and 1200 area.

 



[Guest Condor]

 My higher buy zone is 1230 area (in chart above)which was the area from which the 1302 recent high was launched from.  Currently 1237. 

Otherwise if it goes through that area then the 1200 zone comes into play as you say     I kind of think that it all depends when a shock / drop in stocks hits as to which it will be.

C

[Guest Condor]

Well with that move up in the markets yesterday Gold certainly went South... Still looking for that bottom to get back in and my original idea of the 1200 area buy zone is looking more likely given this what seems like a juiced up Lance Armstrong type US500 performance!  The middle tramline is close to what you had  and I was playing with the idea of the range either side of that with the upper and lower // as to if they could be meaningful or not.  C



[Guest Condor]

..and forgot to say Silver is looking interesting to me aswell in tandem with Gold. C

[Mercury]

Another market I have stayed out of for some time, pondering what is really happening is Gold.  My biggest concerns with Gold are:

1. that it has been largely tracking stocks of late so the recent rally doesn't seem to be driven by stock market jitters, unless this is hedging against a potential stocks collapse.
2. that the hedge funds, and many pundits and news reports, are heavily Long Gold.  When there is so much positive sentiment I am looking for the other shoe to drop...

There are many theories about what drives the Gold market, is it a commodity of a currency (store of value)?  Is it driven up by low interest rates?  Is it a defensive play against falling stock markets?  Is it impacted by USD strength and weakness?  None of these seem to hold all of the time.  Overall, long term, I am bullish for Gold but as we all know the markets don't go in straight lines.  Just now things are turning bearish and I have a feeling that all those Long positions might come under pressure resulting in a sharp drop.  Whether that is a major move down or a retrace I can't tell yet.  If Yellen does signal rate rises today then Gold should sell off.

 

Big picture chart (weekly) shows me that we have either had a Wave 5 termination or a Wave C termination and a rise to Wave 1 (purple), ending in May 2016, as the first stage of a major bull run.  I think the Dec 2015 low was a Wave C rather than a 5 and this is relevant because an A-B-C sets up a motive 1-5, which could run a long, long way.

 

However I am not sure that we have seen the wave 2 retrace after the recent wave 1 high yet.  On the Daily, the market came back down to the Fib 38% support level before the very recent rally and this could indeed be the Wave 2 completion point but if we get a turn back down just now then we have 2 scenarios to track as follows:

 

1. That the Purple Wave 2 is in and the current move is a smaller scale wave 1-2 prior to a large wave 3 up.
2. That Purple Wave 2 is not yet in and the current turning point is a Wave B leading us to a Wave C down to complete the Purple wave 2

One reason I like scenario 2 is that a Wave 2 Purple would come down for a touch on the Weekly Triangle line, which coincides with the Fib 62% off the Daily chart rally up to May 2016.  One thing is sure, when this all resolves and we see the next major turn back up the market will most likely run long and strong.  Could that coincide with the stock market collapse we have been waiting for?

 



 

 

[donaldprice]

I was waiting for some commentary analysis on this commodity, looking at this on the 4 hourly chart the most obvious seen is the change in momentum. As you say if interests rates in the US where to rise today( seems a little unlikely, but then again the economy is according to yellen maintaining momentum) then money will starting going into the dollar and therefore less need for GOLD to be part of ones portfolio. However if given this scenario then we could see a significant retracement of 38%fib max, which then would be the ideal time to go long on GOLD for W3 entry.

 

[Mercury]

Hi   Like the thinking but for me any further moves up should be curtailed by the need to see a decent 1-2 retrace.  If rates don't change today and there are dovish noises (that is unlikely in my view as Fed credibility would be well and truly shot then) then a further leg up could materialise after which we should get the retrace.  Either way I'm waiting for the retrace to go Long big time.  Having said that I have taken a cheeky Short at the recent top with a very close stop against the Fed release.

[Guest Condor]

Here's maybe a curve ball for you - I'm wondering if the inverse correlation between XAU and USD has broken down somewhat.  I've been watching Gold & Silver more closely than anything and it seems to me upside in the $ is not being reflected so strongly in the metals as before a week or so ago.  Thats why we havent seen the retraces of such depth as previously & I'm thinking even if $ stronger today we won't get such a pullback in XAU XAG.  C

 

ps. and both been observing the MA on 4H quite nicely since the 3rd June when reversal occured.

[Mercury]

Hi , I don't really follow correlations too much, except in macro terms, as I believe such things don't hold true all the time nor especially in the short term.  I prefer to analyse each market on its own merits and cross check for anything out of kilter between obviously related markets like the FX triads.  I also don't buy the USD impact on commodities argument in macro terms, although you can see short term impacts.  I believe the market players in commodities operate on the basis of real economy issues and real buyers of commodities hedge the USD separately where they are not USD operating entities, i.e. impacts are seen on FX crosses.

 

For example Gold rushed up to a peak in 2011, which was correlated with other major commodities, but at the same time the USD was not falling but going sideways range bound.  The main reason Gold rallied so hard was ultra low interest rates and QE I think and a hedge against inflation that never really came, hence the resulting correction.  Now things are different so the fundamentals argument has to change too.  This is all speculation really, which is why I prefer to use technical analysis to pick out the market sentiment driven moves and, as  recently said, let the market show its hand to confirm or deny my analysis then act accordingly.

 

That said you can't hang about on the sidelines forever or you will not make any money, hence my cheeky short (well protected) but the real trade I want is at the end of any near term bearish retrace.

[Mercury]

So looks like  was right and now that we have a new higher high I think we can say the 1200 point was the big picture wave 2 retrace.  This is very interesting as it almost certainly shows a major rally on the cards for me.  So now the order of the day must surely be to identify a decent retrace and buy the dips right?

 

As previously stated when I get something wrong and then go back and look at it again I usually find a mistake I made rather than an error in the method (this is a vital part of trading for me).  Gold is no exception and I found that I drew the Triangle line incorrectly on the Weekly chart.  Usually I try several options and perhaps had I not been on holidays when the 1200 hit happened I might have done this but c'est la vie.  On my revised Weekly chart you can see the break and double touch back on the Triangle line.  Now we need to find the Wave 1-2 retrace because Wave 3 is gonna be massive!

 

In addition, this reality on Gold must surely be a precursor to a stock market drop right?  Would love to see commodities turn back down convincingly to cement this view.