Gold weekly update 07.11-11.11
It will be quite long report, because a lot changed since Friday. Thats why lets start step by step.
Recently I got some questions about my style of trading and strategy. Let me explain, before continue with the analysis.
First of all I look the macroeconomic environment to create my main bias. Everyday I look the important economical news to get my daily/weekly bias.
After that I proceed with the charts, using my strategy, which is to follow the banks manipulation, calculate and target the liquidity.
This strategy is based on smart money concept, but it is more advanced, excluding the retail part of the SMC. Sometimes there are few manipulation areas, thats why I use a confluence of pivot points ( on different time frames) to filter these zones.
I have created few indicators which help me to see the important things and help me to trade.
Analysis
During the FOMC meeting on Wednesday Gold formed very strong manipulation to the down side. This manipulation was fundamentally backed. Price was in tight consolidation, part of a big one. Very often this is sign that price is preparing to break strong support or resistance. Thats why I thought Gold will make new bearish swing.
Two days later the banks used NFP news to manipulate the price up, negating the previous strong bearish manipulation. The reading was bearish for Gold, but price made strong bullish impulse.
As I said before,NFP is very difficult to trade, because there is no correlation between the reading, macroeconomic and chart. Banks use this event to wipe out the traders and few hours/days later price come back.
On Friday price formed strong bullish manipulation, negating previous strong bearish one. This lead me that price will go up for a while.
This week my bias is bullish and it remain bullish until the most recent bullish manipulation is negated.
It is very early to say , because Gold is still in consolidation, but I am thinking for change of the major order flow. Which means, that this could be the bottom, next weeks will confirm or deny this theory.
From the chart we can see that 1650 is very strong area (confluence of weekly and monthly pivot points). Price already broke this area.
I think that price will find strong support here - pivot points, moving averages and the top of the main bearish channel.
It seems that Gold will break the main bearish channel ( since the beginning of 2022).
Microeconomic
Since the beginning of the year Gold is dropping , because the FED started to hike the interest rates and the investors preferred to invest in Government bonds and earn money from the Yields. That is why Gold could not react as "Inflation-Hedge" asset.
On last FOMC meeting J.P said that they have no ceiling for the Interest Rates. They will rise them until several CPI readings showed lower inflation. They are prepared to rise the rates even above 4,5-5% (last target).
This is very clear sign that Gold should continue its bearish movement.
We know that several countries are buying Gold like Turkey, India, China. This quarter China bought a lot of Gold, more than last tree quarters.
There are reports that central banks are also buying Gold.
If the FED continue to hike the rates without ceiling and pump the dollar up, this is very dangerous for other foreign currencies.
The central banks may buy Gold to protect the currencies against the dollar. Gold is cheap enough and let them buying at discount.
If this is true, we speak no more for investors level, but for central banks level. They have "unlimited" amount of money and have the power to wipe out everyone and push the price up.
This is my only explanation about the most recent strong push.
Top-Down Analysis
Monthly
As you can see this year, there wasn't bullish monthly candle. This month just started and price is forming strong bullish manipulation on monthly time frame.
Weekly
On weekly time frame, we can see that price already formed very strong manipulation to the up side. This year there wasn't so strong bullish manipulation.
D
Price formed high confluence bullish setup and on Friday Gold reacted of this area. Gold made very strong bullish candle, leaving a lot imbalance behind. This is strong sign that the banks will go up for a while
4H
Gold negated previous strong reaction area by forming new bullish manipulation.
Gold-Yields
From this chart we can see that the bonds are still very bearish.
2Y and 10Y Yields are not dropped(only little retraced) on Friday, but Gold was flying. This divergence is not usual and it is strong sign that something is happening.
Sector - Metalls
The whole sector is bullish for now.
XAUUSD-GDX
The assets are in consolidation and it is very early to say the clear direction, but price already bounced sharply and touch the top of the range.
XAUUSD is still underperformed, but may be GDX will be the leading indicator in this case.
Gold-Silver
SMT Divergence was made and price reacted very strong. It is a sign of change.
VSA
Last bearish swing was made with lower volume than previous. Divergence in volume lead me, that bears are loosing power.
The bullish move is gaining more and more volume.
This is a sign that the bullish impulse is very strong.
Elliot wave
According my wave count price should go up. For now this theory is confirmed. Next bullish wave may be X(last rally before the drop) or start of the new bullish structure - time will show us.
Momentum
We can see that Gold is loosing the bearish momentum.
RSI diverged from the chart more than ones and is going up for now. This is often sign of reversal or deep pull back.
Moving averages are still very bearish, but they are also lagging indicators.
Recently I got some questions about my style of trading and strategy. Let me explain, before continue with the analysis.
First of all I look the macroeconomic environment to create my main bias. Everyday I look the important economical news to get my daily/weekly bias.
After that I proceed with the charts, using my strategy, which is to follow the banks manipulation, calculate and target the liquidity.
This strategy is based on smart money concept, but it is more advanced, excluding the retail part of the SMC. Sometimes there are few manipulation areas, thats why I use a confluence of pivot points ( on different time frames) to filter these zones.
I have created few indicators which help me to see the important things and help me to trade.
Analysis
During the FOMC meeting on Wednesday Gold formed very strong manipulation to the down side. This manipulation was fundamentally backed. Price was in tight consolidation, part of a big one. Very often this is sign that price is preparing to break strong support or resistance. Thats why I thought Gold will make new bearish swing.
Two days later the banks used NFP news to manipulate the price up, negating the previous strong bearish manipulation. The reading was bearish for Gold, but price made strong bullish impulse.
As I said before,NFP is very difficult to trade, because there is no correlation between the reading, macroeconomic and chart. Banks use this event to wipe out the traders and few hours/days later price come back.
On Friday price formed strong bullish manipulation, negating previous strong bearish one. This lead me that price will go up for a while.
This week my bias is bullish and it remain bullish until the most recent bullish manipulation is negated.
It is very early to say , because Gold is still in consolidation, but I am thinking for change of the major order flow. Which means, that this could be the bottom, next weeks will confirm or deny this theory.
From the chart we can see that 1650 is very strong area (confluence of weekly and monthly pivot points). Price already broke this area.
I think that price will find strong support here - pivot points, moving averages and the top of the main bearish channel.
It seems that Gold will break the main bearish channel ( since the beginning of 2022).
Microeconomic
Since the beginning of the year Gold is dropping , because the FED started to hike the interest rates and the investors preferred to invest in Government bonds and earn money from the Yields. That is why Gold could not react as "Inflation-Hedge" asset.
On last FOMC meeting J.P said that they have no ceiling for the Interest Rates. They will rise them until several CPI readings showed lower inflation. They are prepared to rise the rates even above 4,5-5% (last target).
This is very clear sign that Gold should continue its bearish movement.
We know that several countries are buying Gold like Turkey, India, China. This quarter China bought a lot of Gold, more than last tree quarters.
There are reports that central banks are also buying Gold.
If the FED continue to hike the rates without ceiling and pump the dollar up, this is very dangerous for other foreign currencies.
The central banks may buy Gold to protect the currencies against the dollar. Gold is cheap enough and let them buying at discount.
If this is true, we speak no more for investors level, but for central banks level. They have "unlimited" amount of money and have the power to wipe out everyone and push the price up.
This is my only explanation about the most recent strong push.
Top-Down Analysis
Monthly
As you can see this year, there wasn't bullish monthly candle. This month just started and price is forming strong bullish manipulation on monthly time frame.
Weekly
On weekly time frame, we can see that price already formed very strong manipulation to the up side. This year there wasn't so strong bullish manipulation.
D
Price formed high confluence bullish setup and on Friday Gold reacted of this area. Gold made very strong bullish candle, leaving a lot imbalance behind. This is strong sign that the banks will go up for a while
4H
Gold negated previous strong reaction area by forming new bullish manipulation.
Gold-Yields
From this chart we can see that the bonds are still very bearish.
2Y and 10Y Yields are not dropped(only little retraced) on Friday, but Gold was flying. This divergence is not usual and it is strong sign that something is happening.
Sector - Metalls
The whole sector is bullish for now.
XAUUSD-GDX
The assets are in consolidation and it is very early to say the clear direction, but price already bounced sharply and touch the top of the range.
XAUUSD is still underperformed, but may be GDX will be the leading indicator in this case.
Gold-Silver
SMT Divergence was made and price reacted very strong. It is a sign of change.
VSA
Last bearish swing was made with lower volume than previous. Divergence in volume lead me, that bears are loosing power.
The bullish move is gaining more and more volume.
This is a sign that the bullish impulse is very strong.
Elliot wave
According my wave count price should go up. For now this theory is confirmed. Next bullish wave may be X(last rally before the drop) or start of the new bullish structure - time will show us.
Momentum
We can see that Gold is loosing the bearish momentum.
RSI diverged from the chart more than ones and is going up for now. This is often sign of reversal or deep pull back.
Moving averages are still very bearish, but they are also lagging indicators.
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