Week 35: Gold trading plan

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

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Gold trading plan:

Note: While the article is relatively short this week, I have actually spent 3-4X more time on this week’s chart as there were many conflicting signals going on in Gold chart where the trend is not exactly clear.
Weekly Chart:

We can see that MACD and RSI has kind of shifted gear from bullish to neutral last week and it is currently trying to decide to continue the bull or to back test support.

While large trend is bullish, I would believe that the probability of back testing support is higher than going on a non stop bull.

The below key support levels would still be relevant:

  1. 1905
  2. 1860
  3. 1830

 

Daily chart:

From daily chart, we can see that MACD and RSI has weaken and would likely to trend down before the next breakout. There is a consolidation flag pattern seen where the resistance is around 1970 range.

 

4hours chart:

While Weekly and Daily is clear that Gold is likely to head further south, 4hours and 30mins MACD seems to be showing early signs of recovery.

From the chart, it does seem possible for Monday to open slightly higher for Gold to backtest resistance and in case where resistance cannot be broken up, we would see Gold spiking down to complete the Wave C (Impulsive down wave).

On the other hand, we are observing the following:

  1. USD (DXY) seems to have broken out of the downtrend and would be bullish in the short term
  2. Bond yields seems to be coming back up

Both the above points would have a negative impact to Gold in the short term.

 

On potential gold miners, we have noticed this particular company – Liongold where long accumulation of shares have been seen. Do look out for the release of their financial statements in the upcoming week!

(This company was part of the Blumont saga which has devastated many investors/traders in the past. We have however seen changes in Liongold’s management team and injection of fresh funds to clear off the long outstanding debts). Please do your own due diligence as I would consider this company as higher risk due to past track records.

(Disclaimer: Investwhizz has small vested interest due to the rise in Gold price).

 

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