Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
Is the US Yield Curve Inversion Broken? - 3rd July 22
New Signs Economic Turmoil Will Prompt Fed to Lose Its Nerve - 3rd July 22
Stagflation With Powell Could Make Gold Price Happy - 3rd July 22
UK Housing Market Analysis, Trend Forecast 2022 to 2025 - Part 2 - 30th June 22
Stock Market Turning the Screws - 30th June 22
How to Ignore Stocks (and why you should) - 30th June 22
Top Tips For Getting The Correct Insurance Option For Your Needs - 30th June 22
Central Banks Plan To Buy More Gold In 2022 - 30th June 22
AI Tech Stock PORTFOLIO NAME OF THE GAME - 29th June 22
Rebounding Crude Oil Gets Far Away from the Bearish Side - 29th June 22
UK House Prices - Lets Get Jiggy With UK INTEREST RATES - 28th June 22
GOLD STOCKS ARE WORSE THAN GOLD - 28th June 22
This “Bizarre” Chart is Wrecking the Stock Market - 28th June 22
Recession Question Answered - 28th June 22
Technical Analysis: Why You Should Expect a Popularity Surge - 28th June 22
Have US Bonds Bottomed? - 27th June 22
Gold Junior Miners: A Bearish Push Is Coming to Move Them Lower - 27th June 22
Stock Market Watching Out - 27th June 22
The NEXT BIG EMPIRE WILL BE..... CANZUK - 25th June 22
Who (or What) Is Really in Charge of Bitcoin's Price Swings? - 25th June 22
Crude Oil Price Forecast - Trend Breaks Downward – Rejecting The $120 Level - 25th June 22
Everyone and their Grandma is Expecting a Big Stocks Bear Market Rally - 23rd June 22
The Fed’s Hawkish Bite Left Its Mark on the S&P 500 Stocks - 23rd June 22
No Dodging the Stock Market Bullet - 23rd June 22
How To Set Up A Business To Better Manage In The Free Market - 23rd June 22
Why Are Precious Metals Considered A Good Investment? Find Out Here - 23rd June 22
UK House Prices and the Inflation Mega-trend - 22nd June 22
Sportsbook Betting Reviews: How to Choose a Sportsbook- 22nd June 22
Looking to buy Cannabis Stocks? - 22nd June 22
UK House Prices Momentum Forecast - 21st June 22
The Fed is Incompetent - Beware the Dancing Market Puppet - 21st June 22
US Economy Headed for a Hard Landing - 21st June 22
How to Invest in EU - New Opportunities Uncovered - 21st June 22
How To Protect Your Assets During Inflation - 21st June 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Where Is Gold Price Going From Here?

Commodities / Gold and Silver 2022 Jun 02, 2022 - 02:46 PM GMT

By: Chris_Vermeulen

Commodities

After briefly reaching highs above $2000, Gold has fallen to $1785 (-14%) following the deep selling in the US major indexes throughout most of April & May 2022.

Interpretation Of The Current Consolidation In Gold

My team and I see the recent lows in Gold as similar to the April/May 2009 consolidation after the Global Financial Crisis. Also similar to the January 2013 consolidation before an extended -34% price decline took place – ending in December 2015.

The primary difference between now and then is that the US Federal Reserve is currently initiating a new round of Quantitative Tightening (QT), raising rates, while battling Inflation. In both the previous examples, the US Federal Reserve was moving aggressively into Quantitative Easing, attempting to aid in the recovery of the US & the global economy.

It seems to me, that the underlying factors driving the price of Gold have drastically changed. All it would take for Gold to break into a new trend, up or down, would be to see some new catalyst or contagion event come to life.


Gold Weekly Chart

Gold Establishes An New Momentum Base While USD Rallied +15.75%

The strength of Gold over the past 15+ months while combating the strength of the US Dollar has been impressive. I’ve shared my thoughts in many interviews over the past year suggesting Gold was in a consolidation range (moving downward) while still holding up impressively as the US Dollar continued to skyrocket higher.

Trends in the US Dollar and Gold, I believe, are directly related to underlying global economic factors. These factors are prompting a shift away from traditional Growth sectors and pushing traders to reconsider the safety of precious metals. Another factor is that the US Federal Reserve has been actively telegraphing rate increases for nearly 12+ months as Inflation started to surge in early 2021.

I see the extended consolidation in Gold over the past 15+ months, above $1700, as a new momentum base for the price – similar to what happened in 2009 and 2013. The next question is “will it break upward or downward?”.

As time progresses, we’ll have to see how the US Dollar and Gold react to the Long-Term Resistance area I’ve highlighted on the chart above.

Plan A vs. Plan B For Gold Throughout 2022

I like to consider trading to take high probability opportunities within confirmed/defined trends. The smartest move for Gold traders right now is to wait for any future price confirmation before trying to guess which direction Gold will move.

Plan A Plan B
Watch the $1775 level as critical support Watch the $1735 level as critical support
Consider the current bullish price trend as Neutral
if any daily close breaks below $1775
Consider the current bullish trend as continued
Bearish if any daily close breaks below $1680
If the price recovers above $1775 after moving lower,
adjust to a potential bullish price trend for gold.
If the price breaks to below $1735, do not attempt
to ‘bottom-pick’.

These Plan A and Plan B constructs are how I think of trading in general.  It is not worth trying to guess where the price may go or if I’m missing out on some opportunity.  Risking 5% or 10% of my capital on a guess is just not worth it to me. I could be wrong in my guess multiple times trying to chase an emotional belief that a bottom or top is setting up. This, in turn, could destroy 25% to 40% of my trading capital in the process.

If I’m patient and wait for the market price to confirm a trend, then I’ll be able to execute a high probability trade with limited risk.

Falling Back To Long-Term Technical Analysis As A Guide

I created this chart in early 2021 highlighting my cycle expectations for Gold over the next 3+ years. Throughout most of 2021 and into early 2022, I expected Gold to trend downward – reaching a low price near $1625 sometime near February-May 2022. The recent low in Gold on May 16, 2022, was $1785. Prior to that, Gold reached a low of $1676.70 on March 8, 2021.

Although my $1625 level has not been reached yet, I am eagerly waiting for the next phase of my prediction – the potential rally wave that should start in June 2022 or soon after. This next rally phase may target $2000~2050, then stall for many months before continuing to trend higher, targeting $2400+.

Patience is the key to all trading and long-term success. Knowing there are opportunities for very short-term trades every day is fantastic if that is your style. I prefer to trade longer-term swing trades, protecting my capital and trading the most efficient setups.

In my opinion, the best opportunity for Gold traders is to wait for price confirmation of my predicted cycles. Once this happens, then look for opportunities when we know Gold has exited this consolidation phase.

WHAT STRATEGIES CAN HELP YOU NAVIGATE THE CURRENT MARKET TRENDS?

Learn how we use specific tools to help us understand price cycles, set-ups, and price target levels in various sectors to identify strategic entry and exit points for trades. Over the next 12 to 24+ months, we expect very large price swings in the US stock market and other asset classes across the globe. We believe the markets have begun to transition away from the continued central bank support rally phase and have started a revaluation phase as global traders attempt to identify the next big trends. Precious Metals will likely start to act as a proper hedge as caution and concern begin to drive traders/investors into Metals and other safe-havens.

Historically, bonds have served as one of these safe-havens. This is not proving to be the case this time around. So if bonds are off the table, what bond alternatives are there? How can they be deployed in a bond replacement strategy?

Sign up for my free trading newsletter so you don’t miss the next opportunity!

We invite you to join our group of active traders and investors to learn and profit from our three ETF Technical Trading Strategies. We can help you protect and grow your wealth in any type of market condition by clicking on the following link: www.TheTechnicalTraders.com

Chris Vermeulen
www.TheTechnicalTraders.com

Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and is the author of the book: 7 Steps to Win With Logic

Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better.

His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.

He is a regular speaker on HoweStreet.com, and the FinancialSurvivorNetwork radio shows. Chris was also featured on the cover of AmalgaTrader Magazine, and contributes articles to several leading financial hubs like MarketOracle.co.uk

Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.

Chris Vermeulen Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in