A chance to trade gold on new forecasts
18th January 2019 11:22
by Alistair Strang from Trends and Targets
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After rallying strongly since the summer, our charting expert reveals what he thinks gold will do now.
Gold Big Picture. Presently at $1,291
When we last reviewed gold (XAU:USD) we speculated on the potential of growth to $1,263. It obviously reached and exceeded this ambition, in the process giving us a few weeks to figure out what's coming next.
Thankfully, the price of gold sometimes makes sense - or as much as can be hoped, given we're looking at world markets!
Surprisingly, the current hiatus in gold prices dates back to August 2011. The blue line on the chart rather neatly defines the price people are shorting, creating a situation where the scenario; "if it ain't going up, it's going down" rears its head.
We see this more often than we'd like, a situation where the market itself creates a ceiling level, often for obscure reasons.
Often, this imaginary ceiling will provoke reversals.
For us, it creates a complex situation as we dare not treat any rise in the price of the yellow stuff seriously until it exceeds $1,307, perhaps even $1,312 thanks to some gaps in the trading cycle.
If we play safe, movement beyond $1,312 allows for an initial $1,356. If bettered, our secondary calculates at $1,374. Given prior trading highs, common sense alone suggests some stumbles in the region between both ambitions.
Only above $1,374 shall we dare believe some quite strong movement is possible for a future with growth potentials in $200 increments.
For now, the blue line on the chart below is causing problems. The metal requires to melt below $1,285 to suggest real confidence issues, this allowing an initial $1,267 with secondary, when broken, down at $1,258.
To be honest, we shall not be aghast should this occur. For some reason, prices tend exhibit a fascination for major target levels and our prior of $1,263 falls neatly between these drop potentials.
Gold; it's complicated! We suspect it shall retreat to the $1,260's, then recover strongly.
Source: Trends and Targets Past performance is not a guide to future performance
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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