Many of you perhaps vote for the survey of Dukascopy:

What asset class would you invest in for 1 year + term?

From curiosity I have looked at the result and I was a bit surprised, because nowadays a really bearish Gold was the leading class. This result showed me perfectly, that traders believe in Gold, better than anything else.

After this I had a deeper look at the current situation in Gold’s market and I would like to share my experiences with you.

Fundamental Analysis

Although many articles were written about both the Brexit-vote and the US-election, just a few could predict the final results, which fact confused the Forex-market and many instruments, for instance XAU/USD, showed strange behaviour.
In both cases the reaction was strong, but the latter one was a bear-sign, too. Since then the rate is descending (mainly because of the strong USD).

The following snapshot shows XAU/USD Daily Graph:

In the picture we can see the difference between the current and the Brexit-price, and – according to many forecasts – it is complacent optimism.

In December Janet Yellen and the Fed have increased the interest rate (as the forecasts said), and this move made the USD stronger, but trader reactions were not too strong. That indicates that the 1-1.5 month-long bear-rally is close to end. According to the forecasts the next two Fed rate decision will not be a surprise, so the graph will likely show a serious correction.

However, nobody can foresee now what will be the leading economic policy in Trump’s USA, because his nominee for Treasury Secretary (Mnuchin) is an interesting, and a bit surprising choice considering Trump’s campaign.

Traditionally Gold (as CHF) gets stronger in unpredictable conditions - and now we are probably living in one - so it will not be a revelation if the price increases.

Technical Analysis

After we have discussed a few fundamental impacts, which are quite significant in Gold-trading, we should analyse the graph of XAU/USD from a technical point of view.

First, I would like to show what bear-signs I have found.

1. EMA (50, 200)

Figure 1 – Daily graph with EMA(50) and EMA(200)

This snapshot shows us really well, how powerful the bear-rally was, and – according to the EMA – it has not stopped yet. The difference between the two indicators is getting bigger (if you look at the MACD indicator, you can check the details).

2. Gravestone

It is a really weak sign. Figure 1 above shows us a typical bull-gravestone (the last candle), which could predict the further bear-rally, but the next candle will decelerate how seriously we should take this point.

Please note: The next candle was a powerful bull-candle, so the price will unlikely react this sign. 2016-12-31

Secondly, I would like to look into the bull-signs. I will show my ‘evidences’ in Figures 2, 3 and 4.

1. Parabolic SAR

Figure 2 – Daily graph with Parabolic SAR(0.2, 0.02)

Although Parabolic SAR is not a really reliable indicator, but it could be useful to localize where the main trend changes. I this case 26.12 was “turning-day”, so we can expect the price to be gradually growing in the first days of January.

RSI – Similar cases

Figure 3 – Daily graph with RSI(14)

If we check the graph with the RSI indicator, we can observe two similar patterns in the RSI. Maybe it is not too unconsidered to say that this similarity will affect the main graph.
Figure 3 definitely shows a shorter bull-rally (4 weeks) after this pattern and the price may grow circa 50 USD.

Triangle and Fibonacci-forecast

Figure 4 – Daily graph with Fibonacci-retracements

In this picture we can see a strong reason why a lot of people expect gradual Gold increase Gold in the next few months. This powerful breakout from the triangle (which had been forming for nearly 6 months) could have caused the huge drop which seems to be stopped now.

It is important to say something about future expectations as I see it. The Fibonacci-retracements (which is based on the
bear-rally after US-election) suggest the first STOP at 1126 and the first LIMIT at 1168 (Fibonacci: 23.6%).

Considering the RSI indicator’s similar patterns (see RSI – Similar cases) I believe that 1168 is too low a price, so I would say, let the first goal be 1193 (Fibonacci: 38.2%).

All in all I would say, the traders’ faith in Gold is not unjustified, especially in the first few months of the New Year.

Good luck, and Happy New Year,

2016-12-28 - 2016-12-31
翻译为 英语 显示原始