Saturday, July 25, 2020

Bullish on Gold (updated from 11-04-2020)

I currently do not have a long position in Gold which I regret (rectified that). 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 (has in the meantime happened)

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 @ 1.897,50 (GOLD Daily Chart) (updated)
Trend: uptrend; S/D-S/R: 1.791,10-1.923,70 and 8 day EMA support; JCS/SS/8EMA: bullish trigger signs on 17-07-2020.
Trade actual: bought longs on 17-07-2020, stoploss at 8 day EMA.

GOLD @ 1.523,10 (GOLD Monthly Chart) (updated)
Trend: uptrend; S/D-S/R: 1.450,90-1.923,70 and 8 month EMA support; JCS/SS/8EMA: bullish trigger signs in December 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.