Traders are losing interest in Gold on interest rate concerns | 26 Feb
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
|61 (63)||28 (29)||52 (15)|
Total allocation 50% (55%)
Physical Gold: Nature's currency
26 February close: A nearly 3% or $50 drop during the week. The Gold price pattern of sharply weaker prices during just a few trading days has now repeated itself 5 weeks in a row and that pattern started as Crypto peaked in early January. The stronger inflation outlook based on rising long term yields just during the last 10 days and a weakening dollar made Gold coming back up every week. Same this week again where Gold had just started a little uptrend from being technically short term oversold but tanked on Thursday and Friday. This has put our risk weight in a bit of a technical danger zone as all time frames are now pointing down. Our portfolio is long from a substantially lower level which makes our narrative to stay fully committed a little easier to defend. It looks like traders with more diversified portfolio's are exiting on higher USD yields and short term weakness in other major asset classes including crypto. For investors with entries around current levels we see no immediate reason to unwind as risk in most financial asset classes is still very high, whilst unlimited monetary expansion is continues to be part of worldwide stimulus packages. Medium Term risk is very moderately pointing down and also hitting low risk weight zones. Physical Gold must therefore remain a critical hold in our portfolio. No Change.
19 February: Yes, Gold weakened further last week and is likely to remain weaker versus Silver and Platinum in the longer term. This is why we have re balanced our portolio to initially include Silver and also Platinum since last year. The hottest narrative is that precious metals have become a byproduct type fun play for those making millions in Crypto. See our crypto update this week. Our longer term prediction is that physical Gold will prove to remain the most solid and most natural representation of trust and real value. It may be replaced at some point in the near future as a real barter instrument by some internationally recognized and accepted crypto token which serves as backing and/or currency of exchange. L'histoire se répète, even if it takes a generation to confirm. The Long term Gold trend that found its intermdiary bottom in September of 1999 is far from finished and can be the only universal solution to absorb the massive and increasing financial imbalances since the 1970's. Why? Because all major countries own substantial gold and have exclusive government powers to tax for any shortcomings. No Change.
Feb 26 comment
The Quarterly risk to price chart above shows risk dropping from 78 at the end of January to 68 at the end of February. This interim reading is a downtrend and currently supports price weakness.
This chart cannot be used for timing investment decisions or trading. The observation is that we may well see several peaks during a much larger price advance, similar to previous major price advances.
Gold/Euro live price
26 February 2021 close: Gold/EUR showed a very similar pattern of course losing just 2% for the week from 1466 to 1435 benefitting from a slightly stronger dollar. Real chart support unfortunately only comes in at around 1320, but this development now coincides with developing bullish risk weight divergence in daily timescale and where Medium term weekly risk is already in an oversold range with slowing momentum. No Change
19 February 2021 close: Fiat currency fluctuations have become much less significant relative to the major investment categories like stocvks, bonds and soon probably crypto. The Gold narrative therefore applies to Gold versus any other than US$ major currency.
Gold/British Pound live price
26 February 2021 close: Gold GBP is a definite hold as Medium and Long term risk weight is near oversold having lost substantially since the very weak GBP Gold high in August 2020. The current Gold/GBP price of 1240 is still well above the 700 low and which started the present long term uptrend back in Dec 2015. No Change.
19 February 2021 close: Fiat currency fluctuations have become much less significant relative to the major investment categories like stocks, bonds and soon probably crypto. The Gold narrative therefore applies to Gold versus any other than US$ major currency including Pound Sterling. Against GBP Gold looks to get an earlier signal to resume its long term uptrend.