Let`s Consider the gold market, medium-term analysis. Entry points.

Let`s Consider the gold market, medium-term analysis. Entry points.

23 января 2018, 19:09
Sergei Lanin
0
38

Greetings to you, dear friends!

Let`s consider the gold market.

The gold chart (XAU / USD) is a fairly cyclical instrument.

Growth very often begins in December and lasts almost all January (excluding 2009). (See Figure 1.)


Fig.1 - Gold cyclicity


In addition to the fact that, the demand for gold is formed by the industry and by the investors, who buy up shares in mining companies and the technology sector (where gold is used), there is also demand from jewelers. According to the Asian traditions, the jewelry is presented to the Chinese New Year`s calendar, so this is one more reason for the increase in the demand for gold. In this regard, after the New Year, these factors have no influence anymore, therefore it is time for correction. According to my point of view, within the framework of technical and fundamental analysis, we see a maturing correction.

The technical analysis represents the key levels on the daily charts.

Level I 1 342.7 - this level was worked out by a deep drop of gold:

- 08/07/2014

- 02/11/2016

- 14/09/2017 (See Figure 2.)



 Fig. 2 - Level I

Fig. 2 - Level I


Level II 1 356.7 - this level was worked out by a deep drop of gold:

• 03/09/2017

• 07/08/2016

• 27/10/2013 (Watch Figure 3.)

Fig. 3 - Level II

Fig. 3 Level II

The repetition of history testifies to important psychological factors, namely,  bulls are no longer interested in buying gold, and do not open new positions. And the bears, on the contrary, are confident in opening short positions for sale.

The working tactics for Gold after the Eastern New Year


In my opinion, it is needed to draw your attention to the sales after the Chinese New Year, on 16-20 February, at the level from about 1,342.7 or 1356.7. Stop loss I would set in the range of 1 360, 0 - 1365 $.

The potential movement may be predicted to the level of 1 300.0 and below.

Until mid-February 2018, the flats' price is possible in the area of 1 342 - 1 347 dollars per troy ounce.










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