Week 34: Important crossroad on Gold that you would not want to miss!

Disclaimer: All information shared is solely for learning purpose and it does not constitute to a buy/sell call.

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Congrats to all whom has benefited from Gold’s deep flush down last week! We have noticed that while the current flush down is very deep and fast; the immediate recovery from the support has been powerful as well.

We are currently in an important crossroad on Gold where next week’s direction would be setting the stage for future bulls or bears.

If you look into the chart in details, while current gold chart look similar to March 2008 and Sep 2011, they are kind of different when you look close enough – PM me in Telegram to find out how more 🙂

Additional important point: I am sure most of us would have read the news that Warren Buffett has bought into Gold mining company as well. This would imply that he is also in the same view that we may be seeing a long term bull for gold in time to come.

 

CNMC Goldmine investor dialogue update:

(Click here for past analysis on CNMC)

I attended CNMC investor dialogue last week and below are the key takeaways:

1. CNMC finally found higher grade ore for open pit mining.

2. Since inception till date CNMC has not started generating revenue from underground mining – so Wuhan workers would actually be a bonus to their revenue

3. Key management confirmed they are taking lower package in view of COVID19 – this is reflected in the financials as well.

4. Wuhan workers should be starting work before end sep – CNMC have gotten approval to fly some of the workers in. Cross training may happen but will take time

5. CNMC did not hire other workers from Australia nor Africa because there is a quota on hiring foreign workers – if they want to hire, they need to dismiss foreign workers first which is not so good.. Good that now that Malaysia is allowing some of the workers to fly in. 🙏

6. Upside potential is there for CNMC to recover tax from 2019 onward – application still pending

7. CNMC is looking at various cost cutting measures (power gen set, etc)

8. If everything remain sound (no more MCO etc) – CNMC is projecting to be on track to deliver for H2.

 

Gold trading plan:

Weekly Chart:

While MACD and RSI still continued to be at the overbought region, we can see from the chart that in the immediate term, Gold flush seems to be done for now. From the Daily and 4 hours, we have also noticed that the magnitude of selling is kind of on the lesser side for now.

It would be important to monitor gold’s reaction next week and the below 3 levels of supports would be critical:

  1. 1905
  2. 1860
  3. 1830

 

 

Daily chart:

We can see that in the daily chart, the short term uptrend is broken where MACD and RSI are both pointing slightly down. This is caused by the large drop that we have experienced last week.

However, we have also noticed that this “flush down” would be considered as a healthy pull back given that gold has increased exponentially over past weeks. As mentioned in the earlier posts, Wave 5 is over we would need for the new Gold wave to emerge.

 

4hours chart:

MACD has cross up on 13 Aug 6pm – this would provide gold a short term bullish push. We would need to monitor the support lines closely in case Gold revert back down.

As no trading/investments are guarantee sure win, please do your own due diligence and always look at risk to reward and trade with guaranteed stop loss (private message me to know more).

Regards,

Ernest Koh