Gold is hammered and still looks solid | 27 November, 2020
Gold Price Forecast relative to
Long Term Monthly (LT-M) - Medium Term Weekly (MT-W) - Short Term Daily (ST-D) - and Hourly (not shown) data.
(Previous week in brackets)
|Au Trend||↓ (↓)||↓ (↓)||↑ (↓)|
|Au % Risk
|70 (72)||16 (26)||6 (18)|
Total allocation 55% (50%)
Gold is hammered and still looks solid
27 November:: Gold against US Dollar and all other major currencies tanked last week by $100 making the full month decline $200 total. A disappointing move for many speculators in this space usually causing an exit in gold ETF (paper gold) investments. Looking at technicals this price adjustment actually is a relief as both daily and weekly risk weight are now diverging substantially from the long term Monthly risk weight and we are lloking for a bottom to either have been establikshed or will be set in the next day or so. The first major chart objective is the parallel line to the 20 year support line through the 2011 top, now at 2450. Price is still in the upper 30 percent of the trend that started in August 2018. With a further 10% allocation to physical Platinum our Gold allocation within the precious metals divide has dropped from 35 to 30%. The present sub $1800 level is one to accumulate gold again for underweight investors. Otherwise No change.
20 November:: The Gold USD correction that started from a 2075 peak in August may not be quite finished, but as commented last week Gold is building unconditional strength during this consolidation. How deep the corrections goes is a guess, hence our partial risk and opportunity distribution into Silver and Platinum. Once Gold resumes its primary uptrend the speed of the advance cannot be predicted and we strongly believe in the traditional safehaven qualities of precious metals and more so now than ever before with many more Trillions of printed dollars, euros, pounds, swiss francs, yen, yuan etc. Gold since the turn in Dec 2015 and the confirmation in October 2018 is a strong long term hold.
Gold/Euro live price
27 November:: Gold vs Euro will follow the Gold/USD pattern. There may be a little more to the downside and the technical picture otherwise shows the same bullish divergence between daily/weekly and Monthly time frames.Daily has already turned up but may need one more move down before the divergence really kicks in. The market therefore looks positive for Gold with an objective of €1800/oz. The present €1500 level is one to accumulate gold again for underweight investors.
20 November:: The 10% Gold price correction from the August peak we have witnessed against most currencies is technically very shallow in light of the 2 year 70% advance since October 2018. This confirms gold building strenght against most major currencies during this pause in the primary uptrend. Strong long term hold because we are currently witnessing a bullish divergence developing between Medium term Weekly and Long term Monthly. This technical pattern continues to dominate our forecast, besides the unusual, historically confirmed, fundamental reasons to hold precious metals in times of severe economic turmoil.
Gold/British Pound live price
27 November:: Gold vs GBP shows the same pattern again with an extended move down in the short and medium term time frames. A healthy development from a trading perspective whilst long term wealth investors see no indicators asking for caution. Quite the opposite, the present level is one to accumulate gold again for underweight investors.
20 November:: In the same broader picture Gold should perform no different against Sterling. Gold is a strong long term hold against all currencies as the fiat currency monopoly cannot sustain an already worldwide economic pressure now being further influenced by Covid.