Preview of Gold trade - 30th/31st December 2021
Today, I will be posting a preview of gold trading set up. US market review will be release tomorrow.
I have taken a gold trade on 30th December 2021, rationale as follows,
1) Gold Seasonality
Gold seasonality chart ( Source : Seasonax )
Seasonally speaking, based on past historical average, Gold has a tendency to rally from End December till mid-end February, as shown in chart above. The chart shows the tendency to rally / drop, but the magnitude is not implied ( which means it could either rally a little bit or rally a lot, to USD1860 or USD 1920 or USD 2000 , or worse… not rally at all and fall subsequently)
2) Professional buying flow
Additionally based on some proprietary indicators ( proxy indicator measuring money flow , professional accumulation ), there is professional buying flow after Gold fall from USD1860 to USD 1780 level, around early December. I can’t show those proprietary indicators, but I can show another similar indicator that could illustrate this idea, On Balance Volume
Gold daily with On balance volume indicator
As shown in above chart, on December 15th, candlestick hit a low of 1760ish level, but was quickly reversed leaving a trail of wick in the candle stock. candlestick makes a slightly lower low on 15th Dec, but OBV is making a slightly higher high.
Gold weekly Chart – Cup and handle formation in process
On a weekly chart , numerous commentators have been pointing to this Cup and handle pattern , and been speculating the resumption of uptrend, but only to be frustrated again and again. Much hype and attention has been given to Bitcoin and other cryptocurrency, and the talk of them being a digital gold / hedge against inflation/fed money printing press, so Gold has become the widow. Will gold finally regain some market favour now that Digital gold – bitcoin et al wobble and struggle lately ?
Let’s hope that gold can shine once again ( in the next 2 months at least ).
Sneak preview : Tomorrow I will post US market review for the week. And the next article will be Part 2 of the comprehensive US market review in November and December , where I will post additional chart and review of various entry technique.
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