Why I am Bullish When it Comes to Gold, Almost

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For a majority of the year Gold's (GC) price hasn't dropped below its support level of 1320 USD. For the first time this year, the price has dropped below 1300 USD. Ever since it broke above the key 1320 USD level, gold has been under selling pressure and naturally after so many attempts the support would break. Now that the market is back on the move after a long consolidation phase we can take a look at the chart and try to anticipate where the spot will end up.


This chart illustrates the spot price movement over the past 360 days. The spot price representing the price when Gold (GC) is "spotted" in the ground. This is important to traders because ALL trading contracts are measured by the spot price. For collectors or dealers of bars and coins, this is less of a consideration as profit and loss are typically going to come from the fluctuation in premiums, which only loosely correlates with spot price and can vary wildly depending upon many factors. Anyway, let's look at this analysis from the perspective of the former.

What to Expect

At a glance, we can learn quite a bit of information. Considering that even at recent highs gold wasn't in oversold conditions, this will be assumed as a correction, rather than a crash in price. In July 2017, gold was at a low of 1200 USD, and 5 months later a new higher low was formed around 1240 USD. Considering this it would seem that the current spot price has a little further down to go. The pattern seems to like making ~3 sharp waves down upon corrections and so far we have seen only one. It looks likely this pattern will hold and assuming all goes well we can expect Gold (GC) to find a new higher low around 1260 USD, perhaps ever so slightly higher. 

I am a full on bull when it comes to Gold (GC) so if you are looking for a bear case you may want to go somewhere else. In my opinion, Gold (GC) is a buy... almost. Over the next few weeks keep an eye on the price action and watch for the new low to form. If you are a brave trader you can buy in there. For the more cautious and conservative range players wait for confirmation the correction is over before making your moves. If you are looking to make an exit instead, now would be time before the price drops any further, whether this is a move to take profit or simply gain a better position. For the long-term outlook, I will expect Gold (GC) to keep making higher lows and higher highs as it works it's way to a new breakout level over the next umm... decade? The things take a while okay!

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I have received no additional compensation other than the Ethereum that Hade Technologies pays to produce Exclusive content


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