Detailed Gold Analysis - Whats happening! Retail Traders panic?
Hi Traders,
Friday trading just finished and my god, I was very surprised at how badly metals were beaten up... Granted Silver was the better of the bad bunch but still! Absolute massacre...
Now you may be thinking? Surely gold will rebound now? Short answer... is maybe?
Why am I saying this? - Here is the COT Report for this week.
Non-Commercial Commercial Total Non-Reportable
Long Short Spreads Long Short Long Short Long Short
(CONTRACTS OF 100 TROY OUNCES) Open Interest: 435,620
235,560 119,745 44,003 110,844 245,680 390,407 409,428 45,213 26,192
Changes (Change In Open Interest: -2,458 )
-2,156 +17,192 -2,424 +830 -17,266 -3,750 -2,498 +1,292 +40
So the market is on the healthier balance when it comes to longs vs shorts and no longer in that extreme zone. - Now the 17,000 short positions must have been institutions repositioning for October - December where gold is at it's strongest, pushing the price lower on purpose to break people's stop losses to then bounce back.
Looking at fundamentals of multiple incursions happening across the world + stagflation and risk of WWIII and risk of Total economy collapse (cough, China, Cough) I have a baseline that gold should stabilise around 1860 - 1840 mark...
Now the counter argument? - Gold capitulation because of higher for longer on yields... and Gold absolutely hates higher Yields! Why would someone buy Gold if they can just put it in a bank and get bigger % return.
NAME COUPON PRICE YIELD 1 MONTH 1 YEAR TIME (EDT)
GB3:GOV
3 Month
0.00 5.30 5.45% 0 +215 4:59 PM
GB6:GOV
6 Month
0.00 5.31 5.54% +1 +165 4:59 PM
GB12:GOV
12 Month
0.00 5.16 5.45% +7 +152 4:59 PM
GT2:GOV
2 Year
5.00 99.92 5.04% +15 +85 4:59 PM
GT5:GOV
5 Year
4.63 100.07 4.61% +33 +59 4:59 PM
GT10:GOV
10 Year
3.88 94.52 4.57% +45 +78 4:59 PM
GT30:GOV
30 Year
4.13 90.83 4.70% +47 +98 4:59 PM
What can we see from this, that we have yields aggressively pushed through YTD highs, and we are now in the fear of the unknown. Weak US economic data will provide headwind for the yields and the dollar, but FED speak is counter balancing this heavily.
So for now? Do put any long term bets just yet on Gold, day trade, buy off bottoms and stop loss below daily lows at this point is the only option and scalp the hell out of it until it breaks back across 1885, then you can recommence rebuying gold in large quantitites.
SHORT TERM OUTLOOK (1 - 6 months)
Neutral to Bearish
LONG TERM OUTLOOK (6months +)
Bullish with price target in 2024 Q2 to be $2000 mark.
Friday trading just finished and my god, I was very surprised at how badly metals were beaten up... Granted Silver was the better of the bad bunch but still! Absolute massacre...
Now you may be thinking? Surely gold will rebound now? Short answer... is maybe?
Why am I saying this? - Here is the COT Report for this week.
Non-Commercial Commercial Total Non-Reportable
Long Short Spreads Long Short Long Short Long Short
(CONTRACTS OF 100 TROY OUNCES) Open Interest: 435,620
235,560 119,745 44,003 110,844 245,680 390,407 409,428 45,213 26,192
Changes (Change In Open Interest: -2,458 )
-2,156 +17,192 -2,424 +830 -17,266 -3,750 -2,498 +1,292 +40
So the market is on the healthier balance when it comes to longs vs shorts and no longer in that extreme zone. - Now the 17,000 short positions must have been institutions repositioning for October - December where gold is at it's strongest, pushing the price lower on purpose to break people's stop losses to then bounce back.
Looking at fundamentals of multiple incursions happening across the world + stagflation and risk of WWIII and risk of Total economy collapse (cough, China, Cough) I have a baseline that gold should stabilise around 1860 - 1840 mark...
Now the counter argument? - Gold capitulation because of higher for longer on yields... and Gold absolutely hates higher Yields! Why would someone buy Gold if they can just put it in a bank and get bigger % return.
NAME COUPON PRICE YIELD 1 MONTH 1 YEAR TIME (EDT)
GB3:GOV
3 Month
0.00 5.30 5.45% 0 +215 4:59 PM
GB6:GOV
6 Month
0.00 5.31 5.54% +1 +165 4:59 PM
GB12:GOV
12 Month
0.00 5.16 5.45% +7 +152 4:59 PM
GT2:GOV
2 Year
5.00 99.92 5.04% +15 +85 4:59 PM
GT5:GOV
5 Year
4.63 100.07 4.61% +33 +59 4:59 PM
GT10:GOV
10 Year
3.88 94.52 4.57% +45 +78 4:59 PM
GT30:GOV
30 Year
4.13 90.83 4.70% +47 +98 4:59 PM
What can we see from this, that we have yields aggressively pushed through YTD highs, and we are now in the fear of the unknown. Weak US economic data will provide headwind for the yields and the dollar, but FED speak is counter balancing this heavily.
So for now? Do put any long term bets just yet on Gold, day trade, buy off bottoms and stop loss below daily lows at this point is the only option and scalp the hell out of it until it breaks back across 1885, then you can recommence rebuying gold in large quantitites.
SHORT TERM OUTLOOK (1 - 6 months)
Neutral to Bearish
LONG TERM OUTLOOK (6months +)
Bullish with price target in 2024 Q2 to be $2000 mark.
Comment:
Government shutdown issues has been alleviated, I can expect for Gold to bounce given weaker Chinese data pointing to a global slowdown and in which case risk off, dollar to weaken this week.
Trade active:
Seeing strong rejection from 1840 level and entered a small long, SL just below day's low, risk to reward is too great not to try.
Trade active:
Trade is still active, partial tp taken @ 1838, keeping the rest to see if it will rebound today. There is a ton of selling still left & looking at DailyFX sentiment hasn't yet changed, retail is still super long, so I expect rallies to be met with big sells.
Keep an eye out on the US numbers and powell speech, it may spur gold.
Keep an eye out on the US numbers and powell speech, it may spur gold.
Trade closed manually:
Gold is selling, at the moment looks like USD is going into goldilocks period of low inflation and employment, very interesting data!
Comment:
Gold is currently holding the 1830's area, potential for a slight rebound, however do not put aggressive bets as Gold may drop further to 1800s
Comment:
Looks like 1820 support is imminent now!
Comment:
Well Gold reached 1820, I expect Gold to bounce now!
Trade active:
Trade initiated at 1825 - partial tps taken target 1840, with BOJ intervention, we officially have currency wars right now!
Trade active:
Activated another long on Gold, worth risking up to 1815 for a potential run up to 1840s
Comment:
Trade still active unless gold breaks 1815 with confidence
Comment:
Beautiful fakeout by gold followed by a rally! Still in the position and doubled on leverage. SL 1810
Trade closed manually:
Trade closed made over $10 from the move, absolutely beautiful!
Comment:
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Trade active:
trade was activated again at $1815 and closed at $1850 as per supply zones
Trade closed: target reached