Gold GOLD PRO WEEKLY, November 25 - 29, 2019

Sive Morten

Special Consultant to the FPA
Messages
12,898
Fundamentals

Gold stands under impact of the same driving factors as last week, and they are the same for other markets as well. US/China negotiations and US economy statistics.
The only specific factor that we could add here is D. Trump impeachment saga, but it works mostly in the same manner as US/China Agreement - a lot of noise but poor result.

The first big shift has happened on Wednesday as trade and political tensions ratcheted up between United States and China around Hong Kong situation. U.S. President Donald Trump on Tuesday threatened to raise tariffs on Chinese imports if no deal is reached with Beijing.

The U.S. Senate passed a bill backing human rights in Hong Kong and passed a second legislation to ban export of certain munitions to Hong Kong police forces. China condemned the moves and summoned an U.S. embassy official to demand that the U.S. stop its meddling.

"There are concerns that the latest bill passed in the U.S. in support of the Hong Kong protesters might derail the progress in the U.S.-China trade deal," Ilya Spivak, a senior currency strategist at DailyFx said.

"The precious metal, though facing bearish pressures over a strong rally in the equities market, will remain vigorous over subdued global growth and geopolitical uncertainties in Q4," Phillip Futures analyst Benjamin Lu said in a note.


In Hong Kong, the last band of anti-government protesters trapped inside a besieged Hong Kong university were weighing a narrowing range of options as police outside appeared ready to simply wait them out.

"For people trading gold they want more insight to the path forward and where the Fed is at. With equities trading lower, gold is getting a little bit of a lift based off that," said Bob Haberkorn, senior market strategist at RJO Futures.

Financial markets eased as underwhelming earnings and concerns on the ongoing impeachment inquiry against U.S. President Donald Trump overshadowed hopes for a U.S.-China trade deal. Earlier in the session, Washington granted an extension for U.S. companies to continue doing business with China's Huawei Technologies Co Ltd, a move markets took as a sign of progressing U.S.-China trade relations.

After adding Huawei to an economic blacklist in May, the U.S. Commerce Department has allowed it to purchase some American-made goods, and granted a new 90-day extension to minimize disruption for its customers. This prompted Wall Street to open at a record high, and stocks globally raced to a 22-month peak and pushed bullion to the day's low of $1,464.20.

"The fact that gold has been stable within an environment with equity markets driving to new highs ... is a testament that there is still interest in safe haven assets," David Meger, director of metals trading at High Ridge Futures said, attributing it to concerns about economic growth and lingering doubts about a trade deal.

The Fed minutes showed the central bank remains on hold with regard to the direction of interest rates, as an increasingly divided Fed offered little guidance on what would cause policymakers to change their minds on the outlook.

Reuters reported that completion of an initial U.S.-China trade deal could slide into next year as Beijing presses for tariff rollbacks. It cited trade experts and people close to the White House.

Gold prices on Thursday eased from the last session's two-week high after a report that China has invited top U.S. negotiators for a new round of face-to-face
talks, and is seeking to reach an initial trade agreement with the United States.

"Even though there is more tension between the U.S. and China, the gold market takes a wait-and-see stance. It looks like the market is in general a bit tired of news on the trade front," said ABN Amro analyst Georgette Boele. "There have been some buyers on dips and the holders of gold still hope prices will go higher. But if this does not materialise in the near-term, they will likely take profit on longs, pushing prices lower."

China will strive to reach an initial trade agreement with the United States as both sides keep communication channels open, the Chinese commerce ministry said on
Thursday. Beijing has also invited top U.S. trade negotiators for a new round of face-to-face talks, the Wall Street Journal reported on Thursday citing unnamed sources.

The market, yet to swallow the report, was still wary about the fate of a trade deal after the United States passed two bills intended to support protesters in Hong Kong and send a warning to China about human rights. Hong Kong has seen increasingly violent protests against Chinese rule for several months. The passage of a U.S. law supporting the protesters is bound to anger Beijing and potentially undermine efforts to secure a trade deal.

"Gold bulls are not giving up yet but the fight may be in vain, with $1,480 continuing to resist any marches on it," Craig Erlam, OANDA senior market analyst, said in a note. "The consolidation we've seen over the last 10 days has provided some reprieve for the yellow metal but it hasn't yet changed the outlook, with further declines potentially on the cards."

Gold prices edged lower on Friday as the dollar and Treasuries strengthened after data showed U.S. manufacturing output and services activity picked up, limiting
demand for the yellow metal.

U.S. manufacturing output accelerated in November to its fastest pace in seven months and services activity also picked up more than expected, a survey of purchasing managers showed on Friday.

"Stronger data in the U.S. just strengthens the interpretation that the Federal Reserve is going to stay on the pause here, for the next few meetings," said Ryan McKay, a commodity strategist at TD Securities. "That means rates (Treasuries) and the dollar continue to move higher, which constrains gold."

The U.S. central bank, after cutting benchmark rates for the third time this year, had emphasised that it will keep interest rates on hold until the economy takes a downturn. "Fear from the long drawn out trade war seems to be losing its sting as markets price in the possibility that no deal may be reached in the next few months," Silver Bullion sales manager Vincent Tie said. "I believe a greater catalyst to volatility in gold prices now are the actions of the Federal Reserve to expand their balance sheet once again."

"The markets are kind of pricing in just a further delay in trade (deal). The situation is so fluid, which is frustrating," said Edward Moya, a senior market analyst at OANDA.


And the latest news on US/China dialog was released yesterday from G20 summit. It was not really positive for the market, but potentially positive to the gold:

The United States is the world’s biggest source of instability and its politicians are going around the world baselessly smearing China, the Chinese government’s top diplomat said on Saturday in a stinging attack at a G20 meeting in Japan.

Relations between the world’s two largest economies have nose-dived amid a bitter trade war - which they are trying to resolve - and arguments over human rights, Hong Kong and U.S. support for Chinese-claimed Taiwan.

Meeting Dutch Foreign Minister Stef Blok on the sidelines of a G20 foreign ministers meeting in the Japanese city of Nagoya, Chinese State Councillor Wang Yi did not hold back in his criticism of the United States.

“The United States is broadly engaged in unilateralism and protectionism, and is damaging multilateralism and the multilateral trading system. It has already become the world’s biggest destabilizing factor,” China’s Foreign Ministry cited Wang as saying.

The United States has, for political purposes, used the machine of state to suppress legitimate Chinese businesses and has groundlessly laid charges against them, which is an act of bullying, he added.

“Certain U.S. politicians have smeared China everywhere in the world, but have not produced any evidence.”

The United States has also used its domestic law to “crudely interfere” in China’s internal affairs, trying to damage “one country, two systems” and Hong Kong’s stability and prosperity, he added.


China runs Hong Kong under a “one country, two systems” model whereby the territory enjoys freedoms not enjoyed in mainland China like a free press, though many people in Hong Kong fear Beijing is eroding this. The government denies that.

Wang said that China’s development and growth was an inevitable trend of history that no force could stop.

“There is no way out for the zero-sum games of the United States. Only win-win cooperation between China and the United States is the right path.”

CFTC Report

Recent CFTC data confirms idea that market stands "on guard" and doesn't believe too much in soon resolving of US/China contradiction. In last few weeks, despite downside action on gold market - net long position was growing and reached 286K contracts despite price decrease this week:
1574588095158.png

Source: cftc.gov
Charting by Investing.com


Taking its all together we suggest that long-term bullish sentiment still stands on the market due strong global uncertainty and major players still keep large amount of gold in their pockets. Volatility that we see on the market today is mostly the result of short-term speculators that shake the boat using inform agencies' news to extract profit from market swings.

Technical
Monthly


Technical situation is very interesting right now. Short-term price action looks bearish and shows strong downside swings, but all of them are not strong enough to break longer-term picture, which still stands bullish. This is also confirmed by CFTC data. It means that although we've traded gold long first and short then - now is a moment when we have to be delicate and careful with any bearish position. Price comes to the limits and the edge where downside action starts directly confront with longer term bullish context.

On monthly chart situation mostly stands the same and gold keeps bullish context by far. MACD trend stands bullish and price action is forming tight flag consolidation right under resistance area. In general we keep 1530-1585 range as major monthly resistance here.

Butterfly pattern suggests at least 3/8 retracement, which seems solid pullback on lower time frames. It could look scaring but in reality this is normal technical reaction on achievement important target.

That's being said monthly chart keeps long term bullish tendency intact by far.
gold_m_25_11_19.png


Weekly

Weekly trend stands bearish. Although market has shown the reaction on Fib support and weekly Oversold area, that we could call as bullish "Stretch" pattern here, but price wasn't able to climb too high. Recent two weeks show very tight trading range and minor impact on the chart. They do not give us any clue whether gold intends to show more extended upward reaction or it is turning to downside action again.

Existence of weekly Stretch suggests stronger pullback theoretically, so gold could spend more time inside the bearish flag which is forming here. Besides, in a case of dropping - price hardly will go too far as oversold level has not changed significantly and still stands around 1445 area.

By taking a broader view on situation - we have two support areas. First one is hit already at 1447, next one is K-support area of 1362-1380. K-area is also the target suggested by monthly butterfly pattern. Taking in consideration the momentum, it seems that drop should continue after technical bounce as market stands at weekly oversold and near Fib support level. Fundamental factor also points on this scenario as market widely expects positive result in US/China negotiations. Additionally, recent US statistics was relatively positive.

Now we see that price is not at oversold any more. It means that we should be careful to any bearish signs on lower time frame. Speaking on upside perspective - it totally depends on ability to break 1475 resistance. In this case we could consider action to 1488 area. But now, as drop has happened last week - gold has to start everything from the beginning.
gold_w_25_11_19.png


Daily

Despite that we have got weak upside reaction on oversold and 1448 support area - it is early a bit to suggest that gold is going to next 1421 target by the same reason - 1445-1448 K-support and weekly oversold is still there. Thus, our suggestion is better to use conservative downside target, focusing on the previous bottom of 1445 level and do not consider by far 1421 OP level:
gold_d_25_11_19.png


Intraday

On 4H chart we also will keep an eye on 1455 area - Agreement of AB-CD target and major 5/8 Fib support. Also it could be treated as "222" Buy pattern. If you search chances to go long - this setup is the one to consider.

Second reason why we look at it - it should clarify further gold price action. Turning up from here suggests 1475 level second challenge and chances on upside continuation - more extended reaction on weekly support. While breaking 1455 down should lead it back to the lows, or even slightly lower:
gold_4h_25_11_19.png


Hourly chart provides more details on current price action. First is, we could get larger H&S shape, with the top of right arm around same 1473 area. Hence, around 1473 we have scenario split - upside breakout suggests action to next strong resistance around 1488, failure to break it - downside AB=CD action, at least to 1450.

Second, right now, on the slope of our AB-CD pattern we have 3-Drive "Buy" pattern, which suggests potential upside reversal around 1459 - a bit higher than AB-CD target of 1457$. Take this in consideration if you intend to go long.

But, all in all as 4H as 1H chart suggest upside reaction from 1457-1459 level, although later scenario is splitting.

Conclusion

It is amazing but conclusion of last week totally fits to current situation, despite that the whole week has passed. Driving factors are transparent right now, the major question when we will get major impact. As investors anticipate breakout in US/China trading agreement - gold will stay under pressure. Currently we do not see any hazard to long-term bullish tendency, big traders still keep longs on gold. In short-term perspective we will keep an eye on bullish continuation with vital area around 1456 major Fib level.
 

Sive Morten

Special Consultant to the FPA
Messages
12,898
Morning guys,

We're under Ddos attack again, so access to the site is limited, but by some miracle I finally put the videos and try to make a text update on gold market.

On daily chart we have bearish context, but, at the same time, in our weekly report we said that hardly gold could drop too far as weekly Osold level still stands around. Now it is 1438 level. The way, how market responds to intraday targets we suggest another pattern that could be formed here - butterfly "Buy" as it has 1.27 extension right around weekly oversold and current action could be the left wing of the pattern

Gold Daily Chart

On 4H chart our AB=CD target has been hit and market slightly slips below 5/8 support but stands close to it, keeping chances on upside bounce.
Gold 4H Chart

On 1H chart our XOP also has been met. Here we mostly talked about possible H&S pattern, but, taking in consideration daily picture, upside bounce could be smaller than 1472 level, that we've set as potential top of right arm. This could happen, if butterfly will be formed instead. Still, as we've taken long position here - let's keep watching, market stands well by far. Once minor upside action will happen - move stops to breakeven:

Gold 1H Chart
 

Sive Morten

Special Consultant to the FPA
Messages
12,898
Greetings everybody,

As we've said yesterday - gold keeps chance on upside pullback and it finally has started. But, for the truth sake - startup was heavy a bit, mostly it denies our intraday H&S setup and makes us to consider different, closer standing targets of this upside retracement.

On daily chart upside reversal almost gets the feature of reversal bar, but not quite. Formally, it is also bearish grabber, although a weaker type. This combination doesn't bring any valuable information and suggest that we should focus on nearest target of upside bounce, because of butterfly pattern. Its right wing could start anywhere.
gold_d_27_11_19.png


On 1H chart upside reversal has happened neither from our XOP nor from 4H AB-CD target, but market slipped lower. Even when upside action finally has started - there was another tricky W&R action (where I was stopped out BTW). Only then upside action has started. This reversal looks heavy and suggest us to use conservative target and focus on COP around 1465 and 5/8 Fib level resistsance.
gold_1h_27_11_19.png


Thus, if you now could move stops to breakeven on your long position - it would be better to do this. Also it would be better to take profit at COP, also because of end of the week and Thanksgiving day.
 

RogerTC

Corporal
Messages
115
We have mentioned XOP support /entry previously on bitcoin. Market reacted well on the support. Now daily buy signal approaching. If we reach first F3 resistance in 3 bars we can close our long trade and place a sell order for possible B&B trade.

@BTCUSD (Daily) 2019_11_28 (7_42_22 AM).png



Lets drop lower to 4hr timeframe to get more reaction points. Market is testing already a good resistance zone (agreement +confluence) on 4hr timeframe. We have more levels higher up. 7900 -8100 stands as good spot to look for B&B sell trade.

@BTCUSD (240 Minute) 2019_11_28 (7_42_06 AM).png
 

Sive Morten

Special Consultant to the FPA
Messages
12,898
Greetings everybody,

Gold market still can't get started at least some upside action and looks really heavy these days. May be this is due holiday lack of activity, but something tells me that it is not. Anyway, yesterday we've got another bearish grabber on daily chart and it suggests downside continuation as well. Using just common sense, it seems that gold indeed is going lower:
gold_d_28_11_19.png


The major point in our view stands the reaction of the market at major 1457 support area. Here we have major 5/8 Fib support, minor XOP and AB=CD target. This is quite enough to support and push higher any bullish market. It makes us think that gold is not bullish. Despite that price stands in some range - it is below major support area. As no reaction on strong support has happened - we suggest that gold might be going to next, XOP target, which could be reached by butterfly pattern here:
gold_4h_28_11_19.png


Besides, yesterday gold mostly has erased the rally of day before and our AB-CD pattern has changed the shape, no upside action has happen. Now we could use it only to estimate potential top of right wing of 4H Butterfly pattern. Here we could get "222" Sell around COP, where gold could turn down again...
gold_1h_28_11_19.png
 

Sive Morten

Special Consultant to the FPA
Messages
12,898
Greetings everybody,

So, market stands quiet as well as FX and recent two candles on daily chart are inside one to Wed. Thus, I will be short on update. On daily chart, if market will start finally downside action we could get another bearish grabber pattern. Now daily chart suggests 1436 target:
gold_d_29_11_19.png


On 4H chart we also have reasons to count on downside continuation - we've discussed them yesterday. Here, market should return back to the lows, by reaching XOP target and forming butterfly pattern as well:
gold_4h_29_11_19.png


On 1H chart our "222" Sell pattern has changed the shape a bit, but anyway potential reversal still has to happen around our COP target, i.e. soon, as market already stands around it. This should be the top of right wing of 4H butterfly as well:
gold_1h_29_11_19.png
 
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