Originally published by Chamber of Merchants
Gold Chart
Just a quick note for some perspective on the current price action on gold:
Gold is currently testing the diagonal trend line. So far it has held up well, but I would not be surprised to see the gold price push lower to test the price channel. The question is, will it or will it not? From a Merchant’s perspective, the closer the trade entry is to the support zones, the better your risk management is.
On the Cloud Balance chart for gold, the gold price has managed for the first time in a few days to break and remain above the first cloud support which is the thin red line. It is experiencing double support here from the diagonal support in the first chart. However, as I previously said, we may or may not reach the $1200 mark. Calling an exact bottom is almost impossible and there are larger forces at play that know how the average trader thinks and where the stop losses would be. Indeed, with too many traders waiting now for a lower price, we may experience the exact opposite which may be designed to create a fear of missing out. There will also be minor pullbacks on any resistance zones. On the other hand, it would make better business sense to knock out the stop losses that are bunched together like fruit underneath $1190-$1200. It would be a brief and controlled stop loss knock to prevent the selling from getting out of control. So be aware that this is a possibility and a likely probability. As gold bugs and traders hope and pray for a rebound it would make perfect sense to crush their hopes by going where they fear most…$1200. If I were at the Goldman Sachs Group Inc (NYSE:GS) trading desk, I certainly would.
One more thing: George Soros, billionaire and gold investor, was nonchalant earlier this year to announce his gold shares exit, after the fact (of course).
Druckenmiller, investor and billionaire, announced the day after the elections that he had sold his gold trade.
(Signalling us to do the same… through herd behaviour)
These are ambassadors for trends. The same way you have Taylor Swift drinking Pepsi or Tiger Woods using only Titleist or Nike (NYSE:NKE), so we are also shepherded to direct funds in certain directions whenever these or the like of Warren Buffer announce their moves after the fact.
Note: these ambassadors always announce their moves after they have taken or disposed of their positions, not before.
So, this morning we read that George Soros, who sold his gold shares in the beginning of the year, has now doubled his gold mining share holding in Barrick Gold Corporation (NYSE:ABX). This is a little seed that says “Hey, he’s doing it , so maybe we should too”.
Now Soros can sit back and relax while the general market starts to digest his announcement. Keep an eye on articles and announcements where the view toward gold starts softening, especially around good support levels. It is an additional indicator of what the bigger buyers want us to know. If we see an increase of news articles (US and UK ..not Australia unless its from Reuters Australia or similar) then we can assume the accumulation has been completed and gold will be allowed to make sustainable gains again as they literally herd us toward momentum.