Gold GOLD PRO WEEKLY, March 11 - 15, 2024

Sive Morten

Special Consultant to the FPA
Messages
18,794
Fundamentals

No doubts that recent gold rally stands among most important events of the week. The big hype around BTC growth and its exceptional role with ability to replace gold was starting to fade a bit, and gold sceptics become quieter. The majority of analysts explain this with next sentiment change among investors in favor of the Fed rate cut (again!), but we suspect that uncertainty and some political events are the driver of similar strength. Mostly they are related to the US domestic politics.

Market overview

Gold prices hit a three-month peak on Monday, driven by increased bets for a June interest rate cut by the U.S. Federal Reserve. Gold surged about $50 over the course of last week, driven by tepid U.S. manufacturing and construction spending, and weaker price pressures.
"If inflation numbers remain tame, gold's going to continue to trend higher," said Jim Wyckoff, senior analyst at Kitco Metals.
"Heightened geopolitical tensions around the world have reduced the short-selling appetite, basically all strengthening gold's current buy-on-dips credentials," wrote Ole Hansen, Saxo Bank's head of commodity strategy. Silver has broken through some important levels. "It means that gold is not going up alone right now and raises a chance of more sustained growth," Ole Hansen, Saxo Bank's head of commodity strategy, said.

A wider robust fundamental backdrop added support, including strong physical demand in Asia and central bank purchases as well as bullion's traditional safe-haven cachet. Central banks have been net buyers of gold for eight consecutive months. From a technical analysis perspective, gold may still have further upside towards $2,180, a Fibonacci projection level.
"The move became self-fulfilling with stops triggered and then of course that brings in the momentum funds," said StoneX analyst Rhona O'Connell.
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Independent analyst Ross Norman expects gold to hit $2,300 this year: "It's clear that the Fed will certainly cut rates and you'll start to see the market move towards those numbers. Will it happen in next few weeks? Maybe not. But it will probably happen in the next six-month window."
Holdings in gold-backed exchange-traded funds (ETF), other major part of gold demand, continue to slide for now. The world's largest gold-backed ETF - SPDR Gold Trust's GLD holdings - dropped 7% so far this year. The gold-platinum ratio has reached the highest since March 2020, when the start of the pandemic drove it to a record high.

Gold got an additional fillip as the dollar fell after Fed Chair Jerome Powell indicated a rate cut later this year. Beyond rates, other factors have contributed to gold’s strength. Macro funds, which haven’t been active in the market until recently, were a new force of buying. Options-related buying above $2,100 strike price also helped fuel the rally, according to HSBC’s Steel.
"Gold is likely to push higher as bullish sentiment remains dominant. However, bullion may take a little time to digest Powell's overall comments as well as see Friday's employment report," said Tai Wong, a New York-based independent metals trader.
"There's definitely been macro data that's pushed us in this direction and the follow on to policy expectations from the Fed... but the response in the gold market has been multiples of what long-term fair value models suggest," said Michael Hsueh, FX & Commodities Strategy analyst at Deutsche Bank.

Gold raced to an all-time high on Thursday, extending its record run this week as increasing bets for U.S. monetary easing added to sustained tailwinds for bullion from central bank buying and safe-haven demand. Powell said the Fed is "not far" from getting enough confidence that inflation is heading to the Fed's 2% goal to be able to start interest-rate cuts. A low-interest rate environment translates into reduced opportunity cost of holding non-yielding gold and weighs on the dollar, making bullion cheaper for overseas buyers.
Rate cut bets are driving gold prices and everyone is expecting they will come, said World Gold Council market strategist Joseph Cavatoni. Central banks' gold purchases also continue to be very strong, Cavatoni added.
Geopolitical risks are also the major driver for bullion, said James Steel, precious metals analyst at HSBC. "We only have a narrow group of assets that investors can really call safe haven, and gold is number one amongst them." Bullion has climbed over $300 since the start of the Israel-Hamas war.

Gold prices surged to another record high on Friday as data showing a rise in the U.S. unemployment rate boosted expectations that the U.S. Federal Reserve could begin cutting interest rates soon. Bullion was set to post its biggest weekly percentage increase since mid-October. Gold reached an all-time high of $2,185.19 after a report showed a rise in the U.S. unemployment rate and a moderation in wage gains despite job growth acceleration in February. Traders boosted bets the Fed could start cutting interest rates in May to around 30% after the jobs report, although June remained the mostly likely scenario at 73%.
"We still believe the same underlying premise remains, which is the combination of the expectation that the Fed is still going to cut rates later this year and dollar weakness," said David Meger, director of metals trading at High Ridge Futures.
"This (jobs) report will be seen as one that keeps the Fed on course for June. Gold prices will continue to trend higher overall, though a short consolidation may be necessary," said Tai Wong, a New York-based independent metals trader.

Citi raised its gold forecast for the next three months to $2,200 an ounce, and upgraded the projection to $2,300 for the next six to 12 months. It cited recession risks in the second quarter, which can favor gold, “especially given the recent equity and credit market rallies.”
“Speculation over a Fed rates pivot and continued geopolitical tensions keep gold shining,” said Ewa Manthey, commodities strategist at ING Group. “We expect gold prices to trade higher this year as safe-haven demand continues to be supportive amid geopolitical uncertainty with ongoing wars and the upcoming US election.”

When adjusted for inflation, gold set an all-time high of about $3,200 in 1980, according to Peter Boockvar, chief investment officer at Bleakley Financial Group.
We’re still a ways away, which then also points to the potential upside,” said Boockvar, who thinks gold will also test the inflation-adjusted record. Gold has performed well despite high interest rates and a strong dollar, he said. This is largely due to the world’s central banks buying an enormous amount of gold after the U.S. and European Union confiscated $300 billion of Russia’s foreign exchange reserves, he said. You can imagine the mentality of China, Saudi Arabia and other countries saying, ‘Do we really want to have all of our assets in U.S. Treasurys?’” Boockvar said.

What has happened?

The rally itself was peculiar: gold tends to spike in response to globe-shaking geopolitical or economic developments, and nothing particularly noteworthy had happened to justify the surge. The sharp climb higher has left many analysts and other market watchers casting around for explanations, from big investment funds taking a renewed interest in gold, to the role of algorithmic traders that follow momentum in the market, fueling volatility.

The scale of the move surprised some market watchers, particularly since there hasn’t been a significant change in expectations for the Fed’s easing pivot or other macroeconomic drivers during that time. “The velocity and the speed was very sudden, very fast,” said James Steel, an analyst at HSBC Holdings Plc. “It didn’t seem to have a smoking gun.” After months of mostly treading water, the gold market suddenly sprang to life last Friday.

But the reality is that prices didn’t actually have that far to go before hitting record territory. Gold has been trading for months around the $2,000 mark — a level that would have been viewed as stratospheric just a few years ago, and which was only breached for the first time in 2020 as the global pandemic raged. Even more unusually, prices have traded at such elevated levels despite sky-high real interest rates that are typically bad for gold, which doesn’t pay interest. Why were prices so high in the first place? The one reason is China demand.

While many western investors did indeed dump gold holdings as rates soared last year, global demand was underpinned instead by massive purchases by central banks in emerging market countries, led by China. And regular people are buying too — consumers in China have been stocking up on coins, bars and jewelry despite the high prices, to protect their wealth against turmoil in the country’s stock market and property sector.
“The gold market hasn’t been driven by western investors,” said Bernard Dahdah, a commodity analyst at Natixis. “China, so far this year and through last year has been the engine behind gold prices — but not necessarily behind this spike (!!).”
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Still, bullion has far to go to reach its inflation-adjusted peaks set more than a decade ago. Gold has risen more than 600% since the turn of the millennium, though adjusted for inflation it remains below the high of $850 touched in January 1980, equivalent to more than $3,000 in today’s dollars. Recent gains have still been relatively modest compared with some record-notching rallies of the past. That’s partly because prices were already elevated thanks to buying by central banks seeking to diversify their reserves away from a dependency on the dollar.
Central bank demand “puts a buffer on gold,” said Max Belmont, a portfolio manager on the First Eagle Gold Fund, which had $2.3 billion in assets under management at the end of 2023. “And it’s not the western central banks that are accumulating, it’s the eastern,” with China the largest buyer in 2023, he said.

China’s central bank added gold to its reserves for a 16th straight month in February, extending a long buying spree that’s helped to support the precious metal’s surge to a record high. Bullion held by the People’s Bank of China rose by about 390,000 troy ounces last month, according to official data released Thursday. That takes total holdings to 72.58 million troy ounces, equivalent to about 2,257 tons.
1710071932054.png


But overall, the backdrop means the rally could have further to go. And despite the many parallels between the latest record-breaking run and previous gold peaks, the role played by central banks and Asian buying sets it apart.
“The current market behavior, characterized by daily record highs, is unprecedented in my experience,” said Alexander Zumpfe, senior trader at German gold refiner Heraeus Group. “This uniqueness underscores the complexity of the current market dynamics and the variety of factors influencing gold prices.”

The lost major driving factor

Yesterday we've talked about it, but from economical point of view - outstanding pace of the US national debt raising. But you could ask "why is this factor treated as "lost" one if we've discussed it? Because the majority consider it only as the US budget problems. In reality, the exponential US debt growth has wider spectre of problems. First is - this is the major source of the US stock market growth. Most of the federal budget spending, having gone through several circles in the economy, sooner or later ends up in pension savings, insurance funds, and deposits. This ever-growing liability base translates into growth in the stock, bond, land and real estate markets.

With a such pace, the US economy will collapse into a budget crisis: money from taxes is already not enough to cover all mandatory expenses. An ever-growing item - interest on the debt will increase exponentially and at one point the market simply will not be able to satisfy the entire demand for money from the Treasury. And the new issue from the Fed means inflation and rising borrowing costs. Market players understand this and are already purchasing anti-dollars - silver, gold and even bitcoin.

However, the amount of gold in the reserves of world central banks is now close to historical minimums. And although central banks have been actively buying metal in recent years, dollars and euros have been printed much faster. Against the backdrop of the loss of control over the growth of public debt on the part of the G7 countries, it is logical that there will be a gradual change in attitudes towards the quality of debts and a revaluation of gold as a reserve metal on the part of the Central Bank. Therefore, we should expect a gradual restoration of the share of gold in the reserves of central banks to the normality that has developed over half a century - 40%, and as a result, a further increase in its value.

The government budget deficit in the United States is larger than in Italy. At the same time, the level of public debt to GDP in Italy is now higher than in the United States, but, according to IMF forecasts, these indicators will approach in the coming years. The government's net interest payments in the United States and Italy are similar. Despite this similarity, Italy has a BBB rating and the United States has an AAA rating. If the US continues to follow the budget trajectory projected by CBO, then there are increasing risks that the US rating will be downgraded later this year. Nobody is so naive, suggesting that rating agencies are "independent", but the divergence in ratings become too evident and there are less and less of those who wants to overpay for "bubbled" rating.
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Thus, some things that previously should have had to be silenced - now are coming on the surface. De-dollarization comes from where nobody expected. Gold's new price record signals that global central banks are likely to stockpile the precious metal in an attempt to diversify away from the dollar, as persistently large budget deficits threaten to further erode its real value and lead to higher inflation. ️The bulk of seasonal shopping, such as Diwali in India, is probably behind us. In addition, silver did not participate in the growth. It is therefore reasonable to assume that the official sector, i.e. central banks, has been an important driver of gold's recent rally to new highs.

1710074616082.png


Official unemployment figures in the United States are slowly growing, despite the fact that the impending growth of this indicator has long been signaled by the length of the working week, which is very close to the minimums of the era of Covid lockdowns. By the way, the lows of the 2008 crisis era are only about half an hour a week away.
If we add here the drawn and regularly revised figures for job creation, which in 3 years already differ by several million (due to incorrect accounting of people working 2 jobs) and 3 million immigrants who arrived in 3 years, then we can make the conclusion is that everything is no longer as positive as the Fed claims, when it is looking for extra reasons not to lower the rate as long as possible, just to keep the global dollar system and the debt market as a whole afloat.

What can a steady increase in the price of gold and an increase in yields in the treasury market indicate against the backdrop of an inflating techs, and crypto bubble?
The mood of most funds and managers is rather risk-off, not counting the Bigwigs from Wall Street that are selling Nvidia shares to housewives at 800 bucks.

By the way, gold reached a historic high two weeks ago, despite the fact that the dollar index has also been growing since the beginning of the year. Physical demand from global central banks remains high, and speculators have reduced short-selling activity due to geopolitical escalation. They are frightened.

But now is most interesting thing. Gold rally has started after epic events in the US politics. First is - D. Trump finally won long lasting process and Supreme Court has let him to take part in coming elections. Right after this decision, V. Nuland and J. Kerry has leaved their posts. J. Biden team is falling apart. Michelle Obama will not take part in 2024 President's run. In fact, Democrats do not have any candidate who could equally compete with D. Trump. As some experts suggest, It means that the US domestic elites have made some fateful decision - the power goes to Republicans and most probable to D. Trump as an only serious candidate for now.

Indirectly we could make the same conclusion based on recent J. Powell speech - he was more confident and calm than usual. He did not say any new theses, but some conclusions can be drawn from his speech. Last summer, noting how nervous Powell was, It was seemed that he had been given a hard deadline to fix the situation until 2024 election year. The situation, as it is clear, has not improved, but Powell began to talk about long deadlines ("not quickly, but correctly"). What is the reason for this?

It seems that there are two reasons for that. First is - war in Ukraine and Middle East situation are going wrong and against of 2022 expectations that indirectly negatively impacts on global economy and the US own economy. Now everybody knows that this has happened under Democrats government. Second is - Trump's phenomenal success. With the high degree of certainty we could say that if everything would go with the Democrats' plans in Ukraine and in Middle East - domestic political balance would be in favor of Democrats now and attacks on D. Trump would continue, so they could even imprison him.

The logic of last year was that those forces (transnational financiers, the elite of the "Western" global project) that stand behind Biden planned to remain in power after the elections. And today they are clearly ready to give way to alternative elite groups behind Trump. And, accordingly, financiers are now interested not in ensuring that there is no collapse before the elections, but in making it as difficult as possible for the new Trump administration to transition to economic growth.

This is in any case impossible in the next 3-4 years (the structural crisis will continue until a state of economic equilibrium is reached). Note that in official GDP figures, the collapse of the bubble in financial markets can lead to a sharp decline, but in real US GDP figures (about 15-16 trillion dollars before the start of covid), the rate of decline will remain the same, 6-8% per year, taking into account government support. In any case, the probability of a crisis has increased significantly this year.

Correspondingly, everybody in the world see this and trying to insure against big shakes as nobody can foresee the scale of possible crisis. This is the primary reason. All other things, including the Fed policy etc. is just a consequence from major political events. That's why it is very difficult to explain recent gold dynamic by purely economic factors.
 
Conclusion:

It is very difficult now to find any flaws in gold investing. Gold slowly but stubbornly regains the position of a single measure of value (SMV), from which it was displaced in the 80s of last year by the US dollar.

It should be noted that the model of integrating SMV into the economy will differ from the old one, in which gold was used for direct circulation.Now gold will be too expensive against the background of cheaper fiat currencies. However, it will be quite effective to use it as a scale to which the recalculation of clearing operations between the base currency zones (and, possibly, completely private currencies of exporting countries) will be linked. Well, no one denied the role of gold as a means of accumulation.

it can be noted that gold has not yet come close to those cent values at which its purchase becomes not very effective, if we speak about gold as an investing object to preserve the wealth but not for speculation purposes. Experts suggest that 2024 could decide two major questions about gold - its future role in global trade as a reserve asset and whether its paper price has been artificially suppressed in Western markets.

Regarding the first, it is important to mention that the US and Britain are pushing for the confiscation of Russian assets worth about $300 billion. Obviously, this is fraught with dangerous legal and geopolitical consequences. The stupidity of this decision is obvious and it makes no economic sense. ONLY political. Or it may be directly “sabotage” for the global dollar system. Other nations (Arabs, Chinese, Indians and others) will start uncomfortable question: “What if we are not pleased with something?”

The combination of high inflation, another QE and growing budget deficits to save the drowning will make treasury/debt assets useless for storing reserves, due to the impossibility of maintaining purchasing power because of real losses adjusted for inflation, therefore gold and [exchange-traded ] commodities will become an asset where everyone will try to preserve value". Now we can add the above-mentioned factor of the unreliability of Western jurisdictions and the risk of confiscation. Some decision on Russian assets probably could come closer the summer. New power balance inside the US gives the free pass to Democrats and could start acting as as "if there were no tomorrow".

Regarding the price of “paper” gold, we would like to note regularly appearing significant premium on the Shanghai stock exchange. At the moment, there is an arbitrage opportunity that will lead to physical gold moving from vaults in London and New York to the East, which, if not creating a shortage, will clearly reduce the possible supply with increasing demand. Why doesn't the premium collapse? The answer is price manipulation on Western exchanges. Thus, we keep going with our long-term plan of physical gold accumulation, as major global events are yet to come, while gold is already warming up.

Technicals
Monthly

No doubts, we're happy that our long-term plan behaves really great, but, at the same time, so strong upside pace brings a lot of problems for day-by-day trading, mostly because of overbought level. Common sense tells that it is not good idea to buy at overbought. But if you make this decision, you hope on some "exceptions", such as " gold will behave different, FOMO reasons, etc". My experience tells that any pullback after very strong rally gives better chances for entry than jumping running train at overbought level.
New drivers are just starting to act, and definitely moderate pullbacks should happen. But, this is an area where personality comes on first stage and trading approaches are very different among traders.

On monthly chart market is not at overbought that stands around 2235$ area. Here we keep going with top reverse H&S pattern with OP at ~2275$ level. On a way up 2200$ area also looks important - this is YPR1.

Another thing is worthy to mention here - all time COP stands at 2159$. Occasionally it coincides with our monthly COP of last week. But since the yearly time frame is very big scale, this target still could make lasting holding effect on price performance, making it to show at least minor response.
gold_m_11_03_24.png


Weekly

Real problems come on lower time frames. Gold stands at overbought as on weekly chart as on daily. We could talk that gold reacts "different" to overbought compares to financial markets, and commodities could resist better to it, but common sense keeps things simple. We're at butterfly target and overbought. Yes, upside action was strong, trend is bullish and 1.618 butterfly target of 2250$ together with the channel line should be reached probably. But, technical picture suggests downside pullback first:
gold_w_11_03_24.png


Daily

Here market is at overbought as well. Reaction on the butterfly's target suggests 3/8 pullback and it could be really great as we could get nice B&B "Buy" pattern. So, 2115$ level now stands in focus. Next week hardly market drops lower than 2065$, because of daily oversold. It is not rare when market goes to daily oversold, when it hits weekly overbought.
gold_d_11_03_24.png


Intraday

To make this plan works, market has to start forming some bearish pattern on intraday charts. For now - we do not see anything. Minor grabber suggests that the top could be re-visited again. So, our first step is to get reversal pattern here. Then, we could start thinking about daily B&B or anything else.
gold_1h_11_03_24.png


If nothing bearish will be formed every trader will have to make its own decision - either to ignore risk and still take a long position, or keep stubbornly waiting for meaningful retracement. Personally I prefer the 2nd scenario.
 
Last edited:
Conclusion:

It is very difficult now to find any flaws in gold investing. Gold slowly but stubbornly regains the position of a single measure of value (SMV), from which it was displaced in the 80s of last year by the US dollar.

It should be noted that the model of integrating SMV into the economy will differ from the old one, in which gold was used for direct circulation.Now gold will be too expensive against the background of cheaper fiat currencies. However, it will be quite effective to use it as a scale to which the recalculation of clearing operations between the base currency zones (and, possibly, completely private currencies of exporting countries) will be linked. Well, no one denied the role of gold as a means of accumulation.

it can be noted that gold has not yet come close to those cent values at which its purchase becomes not very effective, if we speak about gold as an investing object to preserve the wealth but not for speculation purposes. Experts suggest that 2024 could decide two major questions about gold - its future role in global trade as a reserve asset and whether its paper price has been artificially suppressed in Western markets.

Regarding the first, it is important to mention that the US and Britain are pushing for the confiscation of Russian assets worth about $300 billion. Obviously, this is fraught with dangerous legal and geopolitical consequences. The stupidity of this decision is obvious and it makes no economic sense. ONLY political. Or it may be directly “sabotage” for the global dollar system. Other nations (Arabs, Chinese, Indians and others) will start uncomfortable question: “What if we are not pleased with something?”

The combination of high inflation, another QE and growing budget deficits to save the drowning will make treasury/debt assets useless for storing reserves, due to the impossibility of maintaining purchasing power because of real losses adjusted for inflation, therefore gold and [exchange-traded ] commodities will become an asset where everyone will try to preserve value". Now we can add the above-mentioned factor of the unreliability of Western jurisdictions and the risk of confiscation. Some decision on Russian assets probably could come closer the summer. New power balance inside the US gives the free pass to Democrats and could start acting as as "if there were no tomorrow".

Regarding the price of “paper” gold, we would like to note regularly appearing significant premium on the Shanghai stock exchange. At the moment, there is an arbitrage opportunity that will lead to physical gold moving from vaults in London and New York to the East, which, if not creating a shortage, will clearly reduce the possible supply with increasing demand. Why doesn't the premium collapse? The answer is price manipulation on Western exchanges. Thus, we keep going with our long-term plan of physical gold accumulation, as major global events are yet to come, while gold is already warming up.

Technicals
Monthly

No doubts, we're happy that our long-term plan behaves really great, but, at the same time, so strong upside pace brings a lot of problems for day-by-day trading, mostly because of overbought level. Common sense tells that it is not good idea to buy at overbought. But if you make this decision, you hope on some "exceptions", such as " gold will behave different, FOMO reasons, etc". My experience tells that any pullback after very strong rally gives better chances for entry than jumping running train at overbought level.
New drivers are just starting to act, and definitely moderate pullbacks should happen. But, this is an area where personality comes on first stage and trading approaches are very different among traders.

On monthly chart market is not at overbought that stands around 2235$ area. Here we keep going with top reverse H&S pattern with OP at ~2275$ level. On a way up 2200$ area also looks important - this is YPR1.

Another thing is worthy to mention here - all time COP stands at 2159$. Occasionally it coincides with our monthly COP of last week. But since the yearly time frame is very big scale, this target still could make lasting holding effect on price performance, making it to show at least minor response.
View attachment 90724

Weekly

Real problems come on lower time frames. Gold stands at overbought as on weekly chart as on daily. We could talk that gold reacts "different" to overbought compares to financial markets, and commodities could resist better to it, but common sense keeps things simple. We're at butterfly target and overbought. Yes, upside action was strong, trend is bullish and 1.618 butterfly target of 2250$ together with the channel line should be reached probably. But, technical picture suggests downside pullback first:
View attachment 90725

Daily

Here market is at overbought as well. Reaction on the butterfly's target suggests 3/8 pullback and it could be really great as we could get nice B&B "Buy" pattern. So, 2115$ level now stands in focus. Next week hardly market drops lower than 2065$, because of daily oversold. It is not rare when market goes to daily oversold, when it hits weekly overbought.
View attachment 90726

Intraday

To make this plan works, market has to start forming some bearish pattern on intraday charts. For now - we do not see anything. Minor grabber suggests that the top could be re-visited again. So, our first step is to get reversal pattern here. Then, we could start thinking about daily B&B or anything else.
View attachment 90727

If nothing bearish will be formed every trader will have to make its own decision - either to ignore risk and still take a long position, or keep stubbornly waiting for meaningful retracement. Personally I prefer the 2nd scenario.
Thanks, Sive, for that fantastic down-to-earth and very helpful analysis. However, paper gold is quite expensive to trade while silver is much more affordable. Any chance of getting your thoughts on that?
Cheers and all the best!
 
Thanks, Sive, for that fantastic down-to-earth and very helpful analysis. However, paper gold is quite expensive to trade while silver is much more affordable. Any chance of getting your thoughts on that?
Cheers and all the best!
Hi Rahman,
To be honest, I do not watch over silver closely. Last week we briefly have touched this topic:
While gold has attracted much of the attention in precious metals circles amid its record rally, silver has been slumbering away in a tight range this year. At almost $23 an ounce, it’s more than halfway below its peak reached in 1980 and trading beneath two key moving averages (after forming a bearish death cross technical pattern earlier this month). Change could be on the horizon: Hedge funds flipped to net bullish from bearish, according to the latest US Commodity Futures Trading Commission data.
1710140237547.png


Silver has broken through some important levels. "It means that gold is not going up alone right now and raises a chance of more sustained growth," Ole Hansen, Saxo Bank's head of commodity strategy, said.

Besides, Gold/Silver ratio, as well as Gold/Oil are not cancelled, hardly we will get hard divergence in performance of Gold and Silver - it should be considered in positive mood as well. Maybe it will be lagging a bit to gold and upside dynamic might be of a smaller scale, I suppose. Now it definitely looks cheap, compares to average level around 60. Another interesting moment - ratio always jumps in chaos times - 1940 (WWII), 1991 (USSR crash), 2020 (CV19) - and now it is going higher again.... is it something going to happen soon?
1710140560198.png
 
Hi Rahman,
To be honest, I do not watch over silver closely. Last week we briefly have touched this topic:

View attachment 90732



Besides, Gold/Silver ratio, as well as Gold/Oil are not cancelled, hardly we will get hard divergence in performance of Gold and Silver - it should be considered in positive mood as well. Maybe it will be lagging a bit to gold and upside dynamic might be of a smaller scale, I suppose. Now it definitely looks cheap, compares to average level around 60. Another interesting moment - ratio always jumps in chaos times - 1940 (WWII), 1991 (USSR crash), 2020 (CV19) - and now it is going higher again.... is it something going to happen soon?
View attachment 90733
Yes, the two metals seem to go hand-in-hand and can be expected to appreciate in times of economic and geopolitical uncertainties and turmoil. Okay, thanks Sive.
Cheers and all the best!
 
Morning everybody,

At first glance we have nothing interesting on gold - same upside thrust on daily chart:
gold_d_12_03_24.png


But there are some important practical moments exist. First is, daily thrust looks great indeed, and I would be happy if we would get B&B "Buy" around 2115$ support area. As we said in weekend - gold has completed 2190 upside butterfly weekly target, and stands at overbought. So, overall context for pullback is not bad.

Taking in consideration situation on DXY and EUR that we've talked about, where big reversal patterns could be formed in favor of dollar - gold pullback gets even better context.

On 4H chart we have another, smaller scale thrust, but here I would watch for DRPO "Sell" rather than B&B by three reasons. First is, it better fits to bearish points of larger scale, second - its target stands around 2105$, which is very close to daily 3/8 support, where B&B "Buy" could start forming.
gold_4h_12_03_24.png


Finally, on 1H chart we have valid grabber, potential "222' Buy and signs of bullish dynamic pressure. All these things suggest potential attempt to re-test previous top, which is great for DRPO shape.
gold_1h_12_03_24.png


That's being said, I would hurry up with short position right now watch for mentioned patterns as on 4H chart as on daily one - depending on your time frame trading preferences.
 
Greetings everybody,

Gold was more sensitive to CPI numbers, and has not let our bullish intraday scenario to materialize. But this is normal, as metal is at strong overbought area, downside retracement has to be stronger.
Now we see first step down, and we've got Evening star pattern, suggesting a bit dipper retracement in a way of intraday AB-CD shape. Still, our primary object remains the same - trying to get some DiNapoli pattern, DRPO "Sell" or "B&B Buy"
gold_d_13_03_24.png


On 4H chart action also stands on different way. Upside spike that we've discussed has not formed, so DRPO "Sell" shape is going a bit differently but still it is possible, as market has not reached major 3/8 support area:
gold_4h_13_03_24.png


On 1H chart we're watching for 2145 level, downside XOP target - to see, whether gold will start upside bounce or not. I just would like to see whether Gold will form the 2nd top of 4H potential DRPO "Sell", from 2145 area... But in general, there are no "ready to go setups". On daily and 4H they are not ready yet. For trading daily candlestick pattern - we need the bounce up anyway.
gold_1h_13_03_24.png
 
Greetings everybody,

Gold market yesterday has ignored our downside target and turned up earlier. This is not good sign for bearish context. On weekly chart we have overbought and butterfly, while on daily chart we have Evening star pattern.
gold_d_14_03_24.png


As we've said yesterday, normally we should get something like this on 1H chart:
gold_1h_14_03_24.png


And, in general, raising of US yields, dollar index performance look supportive. But, ignoring of XOP target is a bit tricky moment here. On 4H chart we also do not have DRPO pattern and now it looks like gold might be forming small triangle pattern, which is also might be a bullish sign:
gold_4h_14_03_24.png


So, honestly speaking, despite that bearish context has a bit more arguments now, both directions do not look impressive. As context stands weak and has flaws on both sides. Best decision by our view, is to wait for more clarity, especially before PPI and Retail Sales numbers. If you still decide to trade - for downside action invalidation point is the top, while for long entry it is at 2150 yesterday's lows.
 
Greetings everybody,

Gold shows outstanding resistance to external bearish pressure. Yesterday we've got obviously supportive PPI and Retail Sales data for US Dollar, but gold shows very light reaction. In fact, bullish pennant on daily chart is keep forming. And within few sessions we could get bullish grabber here:
gold_d_15_03_24.png


When gold and dollar start raising together - this is 100% indicator that turmoil is underway, political, economical, it doesn't matter. On 4H chart retail brokers show that we have the grabber - but don't believe it, we do not have it, if you take a look at Comex gold futures.
gold_4h_15_03_24.png


On 1H chart we have minor downside progress with our AB-CD pattern. But with all these stuff on the back, it is psychologically uncomfortable to sell right now. Maybe, gold will make some effort and try to press the lows to achieve OP target, but I have big doubts on it.
gold_1h_15_03_24.png

We prefer to not open position before Weekend but watch for bullish grabbers instead in the beginning of the next week. Because it could happen that we will have to take the opposite position and buy instead of selling.
 
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