Saturday, April 11, 2020

Bullish on Gold

I currently do not have a long position in Gold which I regret. Burned myself too many times buying and selling the most precious of metals.

Will however be a moderate buyer of the shiny stuff at the next daily bullish trade trigger signal.

I think it has not only the potential of besting the all time high of 9 years ago (ca. $ 1.900) but might in future years go well beyond that ($ 2.800 - $ 3.600). Short and intermediate term targets are $ 1.800 and $ 1.925. Yes I know, I hear you thinking, I must be mad suggesting that. And no, I am not one of these permabulls.

Central Banks are lowering interest rates and starting QE programs again. This will lead to further debasement of currencies (more currency chasing the same or fewer goods). Until there is proof that this will actually help the real economy recover and not create new bubbles, these policies might, together with social, economic and financial uncertainty, very well have the unintended consequence of increasing the value of gold. This is, in a nutshell, my fundamental rationale for liking gold. The technical reasons are laid out below.

GOLD @ 1.752,80 (GOLD Daily Chart)
Bullish environment (only longs are considered).
Trade triggers: price levels both near and above the 20, 50 and 200 day SMA.
Trade re-entry trigger: price levels both near and above the 8 day EMA.
Trend: up and strong; MAs: 8 day EMA support; JCS & SS: no major bullish reversal signs.
Trade actual: waiting for bullish trade trigger signals.

GOLD @ 1.523,10 (GOLD Monthly Chart).
Bullish environment (since August 2017).
Investment triggers: Price levels both near and above the 20, 50 and 200 month SMA.
Investment re-entry trigger: Price level both near and above the 8 month EMA.
Trend: up and strong; MAs: 8 month EMA support; SS: no major bullish reversal signs.
Buy/Sell signals: buy longs signal end of November 2018.

Especially like the rounded bottom in the monthly chart.

I do not trade or invest according to these views. For that purpose I only use the Trend Trade & Investment Strategies which are explained at the bottom of this blog. Please also read the disclaimer there.