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The SPDR Gold Trust (GLD) and the gold futures have moved up to key retracement levels in response to rising volatility and may have reached their lowest level, despite the Federal Reserve's aggressive stimulus schedule . This spike in buying could mean better times for gold bugs and mining companies that depend on the price of the yellow metal, while adding firepower to an upward trend in the commodities sector base that could last up to the next decade.
President Trump's harsh criticism of the Federal Reserve may have contributed to the rally, as few people underestimate his power to politicize the central bank in the years to come. Inflation and wage pressures have shown little sign of acceleration up until now in 2018, and this reversal could have a negative impact on the Fed's action, thus strengthening the economy. Interest in buying gold.
Gold has been struggling since the Brexit referendum in June 2016, after an impressive recovery that started just above the $ 1,000 level, and the price of gold has fallen back both last years. This week's recovery improves the outlook, but has not triggered a long-term buy signal as price action remains stuck in the trading range after the 2016 reversal. above $ 1,300 and $ 118 from the GLD fund will be needed to accomplish this optimistic task.
GLD Long Term Chart (2004 – 2018)
The gold fund was launched in November 2004, opening in the mid-1940s and ranging from $ 41 to $ 46. He broke distance resistance in the second half of 2005 and took off in a strong bullish trend that recorded two rally stages in 2008, when he surpassed $ 100.44. The fund and commodities fell more than 30% during the economic collapse, finding support at $ 68.81 and $ 681, while the previous record was reached in 2009.
The multi-year uptrend reached an unprecedented peak of $ 185.85 in September 2011 and staggered into a trading range betraying the outline of a descending triangle, with support close to $ 150. It collapsed in 2013 and started a strong downward trend that finally reached nearly $ 100 in January 2016. A rebound to $ 131 ended in June, giving way to a drop in 24 points which established a trading range still under control two years later.
The monthly stochastic oscillator fell to the highest oversold reading since 2014 in July 2018. The indicator has now entered an unconfirmed purchase cycle, with several weeks of price hikes necessary to confirm the signal, which predicts six to nine months of relative prices. strength. The lowest lows recorded since 2013 have traced a trend line (red line), with the resistance now centered on $ 128, indicating a potential increase of 10 to 12% in the coming weeks.
GLD short-term chart (2016 – 2018)
The sale in August 2018 found support for the Fibonacci retracement levels of 0.618% from the uptrend of 2008 to 2011 (blue lines) and the rebound from January to June 2016 (red lines). This favorable alignment points to a rise in prices in the coming months, perhaps allowing the five-year trend curve to come into play. A break above this resistance level would trigger important buy signals, increasing the chances that gold will end up testing the 2011 record.
For now, market players should expect a mixed action of up to $ 113. Anticipate headwinds in excess of US $ 118, where 200-day resistance to the 200-day exponential moving average (EMA) and the trough in December 2017 may slow or slow growth. Two steps forward, one step back could be used to classify the dominant theme in the months to come, the yellow metal slowly waking up from its multi-year sleep.
The final result
Gold rebounded from key retracement figures, while relative strength indicators rebounded from extremely oversold levels, increasing the chances of a price hike in early 2019.
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