Gold/USD | Gold shows good solid strength | 06 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
|75 (80)||32 (35)||77 (22)|
Total allocation 50% (50%)
Gold/USD live price
Gold shows good solid strength
06 November:: Spot Gold/USD was firm all week closing near the highs at 1948. Last week’s relative bullish divergence between Daily and Weekly versus Monthly played out, although the daily risk level increased substantially towards the 75-80 level. Bullish divergence at this week’s close is developing in the Weekly time frame versus Monthly which is a bullish risk pattern whilst the price holds around and above the 2011 peak. Our uninflated initial objective is 2450 drawing a parallel line through the 2011 peak to the 2004-2018 support line. We do expect an inflated (log scale) price level to develop over time could which will largely be determined by future monetary conditions and proof of unsustainable debt levels coupled with QE to infinity.
31 October:: History tells us that negative turmoil in equity markets after a strong advance (inflation) initially drags gold down as investors need to remove more portfolio risk as well as requiring the cash to compensate for margin calls etc. Nothing special about that. In the technical space nothing has changed in terms what should be expected looking at 100 years of market history, which is for Gold (and Silver and Platinum) to finish the uptrend showing at least strong bearish higher price to lower risk divergence in both the Medium and Long term time frames. Hence no worry and no change.
Gold/Euro live price
06 November:: At 1628 Gold/Euro is holding and consolidating very nicely with a similar linear chart parallel resistance at 1800 based on price pattern as Gold/USD whilst the first Fibo objective sits at 2097. Gold vs Euro is a hold.
31 October:: The Gold Euro picture is only different in the sense that smaller weekly readjustements of the EUR/USD exchange rate impact on the gold price versus Euro. Gold prices against all major currencies are building, not yet realized, shorter versus longer bullish divergence. This technical position is visible across the gold price spectrum and encourages looking at the first Fibonacci objective of 2097 Gold/Euro.
Gold/British Pound live price
06 November:: GBP funnily enough looks stronger against Gold than USD or Euro, yet the Weekly divergence versus Monthly that now develops (change periods in chart below) make Gold looking quite strong vs GBP and we expect to start looking at a log scale chart sometime during the next 12 months as sterling weakness into a similar inflationary spiral seen between 1970 and 2000. Gold is a hold for Sterling based investors.
31 October:: Gold/GBP is no different than Gold/EUR or Gold/USD in this wider perpective, even though Gold/GBP has shown some negative divergence this year, but not to an extreme extend that increases likelyhood of a major top having been made or being in the making. No Change for GBP tax based investors in Gold.