Gold/USD Price forecast | 02 October, 2020 | GOLD DOWNTREND LOOKS BULLISH
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)
| Gold/USD | LT-M | MT-W | ST-D | |||
|---|---|---|---|---|---|---|
| 1898 (1861) | ||||||
| Au Trend | ↓ (↓) | ↓ (↓) | ↑ (↓) | |||
| Au % Risk Weight |
80 (87) | 52 (58) | 37 (13) | |||
| PM Allocation Limit(50%) | Invested | Pt:20% Ag:45% Au:35% (100%) | ||||
Gold/USD live price
Quarterly gold price and risk weight 30 Sept 2020
The current high risk level appears to develop a similar pattern as the 2002-2006 period. Prices do not necessarily react to very overbought risk levels and more to divergences versus other relevant time frames.
No Change to asset allocation
25 September:: Corections are tough to deal with sometimes if that correction erodes a paper profit. Gold/USD fell 80 dollars last week still ending in the upper 2011 price high range. The highest weekly close in 2011 was 1882 on Aug 29 and this critical asset class for welath protection just held above that level for 9 straight weeks before a more serious reaction followed. We have been expecting such an event due to lack of momentum as well as a positive correction of the US$ currency. Gold reached its intermediate low around 1050 in Dec 2015, rallied towards 1370 and then bottomed again in December 2016 at 1125. Rallied gain twowards 1370 in 2018 and bottomed in August 2018 at 1160. These are all $200 advances and corrections or 16% every six months or so. So far, after a near 100% rally from that 2015 low we have seen a 10% correction. A similar 16% correction targets $1750. That level would be the top of the price range developing between March en July this year. Entirely possible. By FAR the biggest risk right now is for mainstreet to lose trust in our financial system. Even public outrage may develop rapidly as the highest level beneficiaries of this Multi Level Fiat Money Marketing scheme or Ponzi scheme at the the expense of most taxpayers is getting out of control, which it will.
Technically we first need to see bearish divergence in Medium term weekly and or Monthly indicators. That probability, before a more serious correcton, if at all, occurs, is closer to 100% than 80% and this is now the main reason for being VERY patient. No Change.
Gold/Euro live price
02 October:: Gold still looks more vulnerable against Euro, but the expected technical picture after 5 years of unfinished business is for a strong bearish divergence after a very strong price rally. That hasn’t happened yet. The Eur/USD exchange rate fluctuation will continue to blur the gold trend analysis somewhat and we look to follow the Gold/USD price as ‘the’ leading indicator until the status of World reserve currency takes a different corner.
25 September:: Gold vs Euro fell around 10% from recent highs, and still 60% above the 2018 low. Arguably Gold vs EURO has shown mild bearish divergence justifying a technical correction., whilst the linear scale objective is 1800. A close well above that would open for a log scale rally of 3 times the 75% rally since October 2018 or a theoretical ‘intermediary’ target of around Gold/EUR 4000. No Change for Gold longs vs Euro like ourselves. Same for CHF.
Gold/British Pound live price
02 October:: A very similar story for Gold/GBP as for EUR. As our GBP/EUR exchange rate guidance is still bearish in this high volatility environment Gold/GBP should also remain a core holding for Sterling based investors.
15 September:: As the USD increases in value Gold we do a little better against other major currencies. Gold ‘only’ dropped 8.5% vs GBP thusfar. Initial objective just above 1600. A significant break above 1625 means log scale = inflationary development.