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Jan 16

How about Going Short at Gold?

goldweekly

 

golddaily

 

Currently, Gold is at downtrend. It appears to form double-top. It may touch 23.8% fib level. If it goes further below, the price may reach at 1188 level. In the weekly chart a pin bar is forming. May be it should be watched for another week. Short entry near 1250~1260 zone looks good?  I’m adding forecast from marketwatch.com

5 comments

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  1. Trader

    I would like to thank our Analyst-Commodity to share his view on GOLD. Good work!!

    At the same time I would like to welcome all group members to share their views on gold. Specially, Analyst-Asia pacific region can also share his view or opinion base on his regional currency movement cause Aussie dollar is very much correlated with gold movement.

    I would like to welcome our two new members who were absent in our last group meeting. As they were not assigned to any work yet, I would request them to do some analysis on the fundamental news of GOLD. You can search different websites or major financial news sources. Some links are also given in our webpage.

    I have also an analysis on gold, I will share that with you if I get some feedback from our other active members. Please remember, it is a continuous learning process, don’t hesitate to put your comments or analysis. Expert traders can comment on your analysis and can give you good suggestions to improve your skill which will eventually benefit our group.

    Please see the attached image to understand the relationship of other pairs with gold.

    Relationship

  2. Analyst- AUD pairs

    During times of US dollar weakness, gold often increases in value as many investors choose to own gold rather than US dollars and vise versa. In general, when the price of gold has risen so too has the Australian dollar relative to the US dollar. This article would help to understand.

    http://www.theaustralian.com.au/business/wealth/if-the-precious-metal-rebounds-the-australian-dollar-is-likely-to-strike-gold/story-e6frgac6-1226676195972#

    However, there are two different predictions of the gold price from the analysts for the next one year.

  3. Chief Trader

    I am in favor of Gold short when it retraces to the resistance zone as indicated in the figure below:
    XAUUSD1
    @ Analyst Commodities
    Could you please discuss/indicate some risks associated with this trade idea before we decide to place some pending orders?

  4. Trader

    GOLD Forecast:

    • This gold analysis is base on technical analysis + sentiment of the market + fundamental news results impact.

    2

     

    • If we see the above daily chart of gold, we can see a trend line marked by blue line. Several times, price moves towards that trend line region and bounce back. If you enlarge the chart, you can also see that this trend line was maintained almost from last quarter of 2012 when it started to fell from the sky.
    • Now the price is very near to that trend line. If it moves few pips up it will reach the trend line and technically it will be a very good place to sell around 1280-1290 zone marked in the chart as resistance zone.
    • If we see a false break around that trend line and if it touches that resistance zone, it will be a nice place to look for price action sell signal from that region.
    • At this moment, I am in the sideline for gold trade. Cause if it goes down from current position it must be supported by strong fundamental news to break the double bottom area. Moreover, a divergence has been created (marked in the chart), so it may go further up if the down trend is not very strong.
    • In a very long time analysis, I am also in bearish side. However, the way will not be so simple. It will definitely try to play with market sentiment. If we think in the reverse way, how will gold price receive that momentum to break the double bottom zone without the help of breaking fundamental news? It must go up and create a hype that it will go further up. Now let us starts from beginning, if price breaks that trend line some people will be neutral in gold, some may go with bull. If price breaks the resistance zone, many people will be bullish and some will be neutral. For gold, 1320 zone is also very important cause when price was falling from sky many people thought that it would be the place where gold should bounce and eventually it happened. Therefore, it will be a strong resistance zone for gold when it will move up again. Now, if price breach that level and create a false break many retail traders will be trapped. Institutional traders and big investment company always try to trap the people with dumb money. The fat cats are so fat that they always try to eat the money of the retail traders. Now if price go down rapidly, most of the traders will be on the losing side and market will get a new momentum to break the shackle and may go down further. In addition, if it happens price will definitely reach 1000 zone at least.
    • I don’t know why I am thinking it in a complex way!!!!! To make it simple I have a plan to trade gold.

    5

    • I will divide my whole lots in to 4 parts. I will use my first part when I will get any price action signal near 1280 zone. If it goes against me, I will add my second part near 1320 zone (resistance zone+23%fib of weekly chart) if I see any sell signal. I will add my third part near 1360 (resistance zone). Last part will be at 1417 zone (resistance zone+38.2%fib of weekly chart).
    • At this moment, market is very much confused in which way it should go. If we look at EURUSD chart, we can see that price is fluctuating a lot. After the partial tapering by the FED, market has not gained any momentum in either direction because the following news was not supporting to make dollar strong. We all know that when market is not sure whether it should go the price of gold spikes. Therefore, in my view at this moment gold market has not enough force to go down easily unless we get a clear call from safe heaven..

    Sorry for long reply. May be I am doing over analysis…….

    1. Analyst Commodities

      I’m also adding some useful link about market sentiment of Gold.
      Gold Prices “Due Retracement” as Deflation Skirts US, Eurozone: http://goldnews.bullionvault.com/gold-price-deflation-011620145
      China’s Gold Buying “Make or Break” for 2014 Prices: http://goldnews.bullionvault.com/buying-gold-011320146
      Jim Rogers on Gold, Silver & the Coming US Crisis: http://goldnews.bullionvault.com/jim-rogers-gold-121220131
      Gold Mining Costs “Put Floor” at $1150, Supply to “Decline Rapidly”: http://goldnews.bullionvault.com/gold-mining-price-011520146

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