Gold has entered its 5 year Resistance Zone (1350 - 1365). This alone is an immediate sell signal. What's even more interesting though (and a stronger reason to go short on Gold) is the cycle that the metal tends to seasonally follow every 1.5 years.
The chart speaks by itself. I have distinguished two time periods: 2017/18 and 2019/20. Every time the price enters the 1350 - 1365 monthly Resistance Zone, longs take their profits and a balance between buyers and sellers is observed roughly within 1300 - 1365. I call this the sell accumulation phase where the market is undecided but sellers eventually prevail under the heavy pressure of the 5 year Resistance level. Note that there is always a catalyst (normally geopolitical tensions) that drives the price towards that Resistance Zone (N. Korea, stock market crash, Oil crash, trade war and more recently the U.S. - Iran tensions) but it eventually fails.
I take this as a strong long term sell signal. The target can differ but I am counting (and targeting) at at least 1220 - 1240, with a strong probability for 1200 also.
What about the cup and handle forming and the inverse head and shoulders at weekly level? Also, the stock market is already facing a major resistance and if it fails, then don't you think that gold will finally be able to break that 5 year resistance and target ~1600?
telnemri
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On the other hand, if it goes your way, the E leg will form
This year is different. Gold going to new highs. A lot of risk in the markets. A lot more debt. Yield curve inverted earlier this year. I could be wrong. Trade what you see.
@giltwenty, People said 'this time is different' all previous years. First they claimed that the EU debt crisis will start a global recession, then they worried about China's slowdown, then it was Deutsche Bank, then North Korea, the trade war... the oil drop to $27...
giltwenty
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@TradingShot, Yes true. I could be wrong. Maybe the people want to see gold break new highs but as we know the people majority get it wrong. Time will tell. As traders we accept our wrongs and move to the next! And if we are humble in defeat we can have an objective perspective and continue to make $$$$