The collapse in gold prices is not yet averted

After the collapse of Monday 9 November when gold lost 5%, in the following sessions there was an attempt to rebound which, however, did not change the bearish scenario much. Hence, the collapse in gold prices is not yet averted.

That there is a negative sentiment towards gold is also evident from a figure that had never been revealed in the last 10 years. For the first time in this period, in fact, during the third quarter of 2020, central banks sold gold by reducing their reserves. However, a survey conducted by Invesco of central banks showed that gold’s appeal remained unchanged. For the next 12 months, therefore, expectations are for an increase in central bank gold reserves.

According to this survey, therefore, in the long run, gold remains very attractive in the long run, in the short, however, there could be some downward shocks.

According to the graphical and forecast analysis, the collapse of gold prices is not yet averted

Their (real-time price) closed the session on November 13 with an increase of 0.69% compared to the previous session at an altitude of 1,886.2 dollars. The week, on the other hand, ended with a fall of 3.36%.

Daily time frame

The session of 9 November caused gold prices to collapse and initiated a bearish projection (dashed line) which targets the levels indicated by the dotted lines. As can be seen from the graph, the remaining four sessions of the seventh failed to break up the level in the area of ​​$ 1,885.5, so the bearish scenario with the next target in the $ 1,804 area is still valid.

A daily close above 1,885.5, on the other hand, would start the prices towards the objectives indicated in the figure (solid line).

Gold: bullish projection underway on the daily time frame (dashed line). The red oblique lines represent the Running Bisector levels; the horizontal lines the levels of The New Law of Vibration. The volume for each price level is shown on the left. The middle panel reports BottomHunter’s signal. The minimum on the considered time frame is marked when it is equal to 1. The lower panel shows the volume traded for each bar compared with a 20-period zero lag exponential moving average.

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Weekly time frame

The weekly bar was quite devastating for the ongoing bullish projection (solid line), but the support in the $ 1,830 / $ 1,850 area has resisted the bearish pressures. Everything, therefore, is played around the 1,830 / 1,850 dollar area and its holding keeps intact the probabilities of reaching the bullish targets indicated in the figure. Otherwise, prices would plummet towards the bearish targets (dotted line) indicated in the figure.

Gold: bullish projection (solid line) in progress on the weekly time frame. The red oblique lines represent the Running Bisector levels; the horizontal lines the levels of The New Law of Vibration. The volume for each price level is shown on the left. The middle panel reports BottomHunter’s signal. The minimum on the considered time frame is marked when it is equal to 1. The lower panel shows the volume traded for each bar compared with a 20-period zero lag exponential moving average.

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Time frame mensile

The level to be monitored at the monthly close is $ 1,860. A monthly close below this level would cause prices to plummet towards the $ 1,629 area (price target II). Its holding, however, followed by the breakout of the $ 1,940 area would project the prices towards new highs to be calculated after the reversal.

Gold: ongoing bearish projection on the monthly time frame. The red oblique lines represent the Running Bisector levels; the horizontal lines the levels of The New Law of Vibration. The volume for each price level is shown on the left. The middle panel reports BottomHunter’s signal. The minimum on the considered time frame is marked when it is equal to 1. The lower panel shows the volume traded for each bar compared with a 20-period zero lag exponential moving average.

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Deepening

Is the rise in oil to be taken seriously or are new downside surprises awaiting us?

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