Hello everyone. Today we will analyze the monthly chart of gold (XAU/USD). Point by point, as always.
We see the classic re-accumulation of the asset according to the principles of Wyckoff.
1. After the recession in the economy in 2008, we saw how smoothly liquidity flowed from all risky assets into risk-off (metals). Mark up phase
2. Mark-up ended in August 2011. We see Bc zone (buying climax zone)
3. Then correction (sellers reaction) began. It lasted lasted until May 2012.
4. Further, bulls took the initiative into their own hands, tried to break the resistance, which was created by bc zone, but failed, forming Lower High. All this happened on diminished demand characteristics.
5. Then We got a true change of behaviour reaction from bears, which pushed the price down to the 0.5-0.618 fibonacci zone from the mark-up. Look at the climactic volume, composite operators bag have been fullfilled greatly!
6. They started accumulating ... 6 years in the 1200-1400 range.
7. August 2019. We left the range (break out) and started a new local uptrend. We stopped at the level of 2000 - that is buying climax (Coronavirus climax)
8. We stopped in the previous supply zone. It was quite obvious to expect stopping action here.
9. At the moment, we are in trading range (typical "before break out range") pressing the resistance 11 year resistance. Recently we saw BIG CLIMACTIC volumes related to panic about geopolitics, true bearish sentiment on all risky assets (THE RATE WILL BE RAISED! DONT THINK A LOT. JUST SELL ALL YOUR SHARES RATHER, LETS HEDGE OUR MONEY IN GOLD IT'S SO OBVIOUS ... (Powell is laughing out loud) This does not mean that we will see a downtrend in gold on the monthly chart. But on such sentiment, we probably will not continue down trend in SP500, Nasdaq. On gold it is a local point of excitement , on risky assets we have not seen it yet!
10. There is only one question. When? When will the Fed run out of strength to hold the unstoppable? That would great time for us to see a true sign of strenght on the chart.
Volumes and price action: correspond to the classic accumulation according to Wyckoff:
a) Great volatility, big spreads of the bars, big volume spikes in phase A (2011-2013).
b) Decrease in volumes + decrease in spreads and volatility in phase B (2013-2018)
c) Lps at low volumes in phase C (2018)
d) Ease of movement to the upside in phase D until we reached resistance level (2018-2020).
e) Trading range before true SOS in supply zone
f) Climactic volumes in February-March 2022 (attempt to break out). Quite a lot supply anyway as we close the month with a supply tale so we expect short term (weekly) absorbtion.
We see the classic re-accumulation of the asset according to the principles of Wyckoff.
1. After the recession in the economy in 2008, we saw how smoothly liquidity flowed from all risky assets into risk-off (metals). Mark up phase
2. Mark-up ended in August 2011. We see Bc zone (buying climax zone)
3. Then correction (sellers reaction) began. It lasted lasted until May 2012.
4. Further, bulls took the initiative into their own hands, tried to break the resistance, which was created by bc zone, but failed, forming Lower High. All this happened on diminished demand characteristics.
5. Then We got a true change of behaviour reaction from bears, which pushed the price down to the 0.5-0.618 fibonacci zone from the mark-up. Look at the climactic volume, composite operators bag have been fullfilled greatly!
6. They started accumulating ... 6 years in the 1200-1400 range.
7. August 2019. We left the range (break out) and started a new local uptrend. We stopped at the level of 2000 - that is buying climax (Coronavirus climax)
8. We stopped in the previous supply zone. It was quite obvious to expect stopping action here.
9. At the moment, we are in trading range (typical "before break out range") pressing the resistance 11 year resistance. Recently we saw BIG CLIMACTIC volumes related to panic about geopolitics, true bearish sentiment on all risky assets (THE RATE WILL BE RAISED! DONT THINK A LOT. JUST SELL ALL YOUR SHARES RATHER, LETS HEDGE OUR MONEY IN GOLD IT'S SO OBVIOUS ... (Powell is laughing out loud) This does not mean that we will see a downtrend in gold on the monthly chart. But on such sentiment, we probably will not continue down trend in SP500, Nasdaq. On gold it is a local point of excitement , on risky assets we have not seen it yet!
10. There is only one question. When? When will the Fed run out of strength to hold the unstoppable? That would great time for us to see a true sign of strenght on the chart.
Volumes and price action: correspond to the classic accumulation according to Wyckoff:
a) Great volatility, big spreads of the bars, big volume spikes in phase A (2011-2013).
b) Decrease in volumes + decrease in spreads and volatility in phase B (2013-2018)
c) Lps at low volumes in phase C (2018)
d) Ease of movement to the upside in phase D until we reached resistance level (2018-2020).
e) Trading range before true SOS in supply zone
f) Climactic volumes in February-March 2022 (attempt to break out). Quite a lot supply anyway as we close the month with a supply tale so we expect short term (weekly) absorbtion.