Gold GC-Mini Market Analysis
This week the Gold GC-mini saw a 474.9 point sell off. Price then bounced sharply off of $4100 closing the week near $4500. This week there was a massive bearish breakout, closing well below the key psychological level of $5,000. The transition from a bull channel to a bear trend is confirmed by the sustained lower highs and lower lows on the weekly and daily charts. We are witnessing a significant, high-volume reversal. For months, we’ve had a strong, parabolic bull trend. Parabolic moves don’t last, and they almost always lead to a deep correction rather than a trend continuation. After an 8-day losing streak, gold fell over 15% from its all-time highs near $5,500, marking its worst weekly decline since 1983.
The bulls are buying this dip. The weekly chart shows a strong buying response especially when price moved too far beneath the moving average. The weekly chart is still always in short, however determined bulls see this as a strong bull trend in a pullback.
Global instability is a factor for the bulls buying. Even with escalating geopolitical tensions, the “safe-haven” bid failed. Buyers trying to catch the falling knife were trapped on multiple days.
The Weekly Gold chart
- Bulls want a strong bull reversal bar that would suggest the correction is over.
- Bears want to maintain a gap between price and the moving average.
- Bears did not close a body beneath the neckline tail of the first big drop occurring the week of February 6th.
- Large gaps to the downside between the open and close of the past 3 weeks.
- The large tail shows the determination of buyers.
- The body in comparison to the tails is small means it is a weak bull bar.
- Bulls need a strong reversal bar on the weekly chart in order to suggest the correction is over.
- 3 of the past 4 bars are strong bear bars.
- 2 consecutive bars closing beneath the moving average.
- Always in short.
The Daily Gold chart
- Bears want to continue the trend downward.
- Bulls want to create a trading range.
- Bears want to maintain a large gap beneath the moving average.
- Bulls want to close consecutive bars above the moving average. Flipping market sentiment.
- 3 out of the 5 bars this week were bearish. However, only 1 of those bars were strong with a large body closing on its lows.
- Bulls bounced back from the low of $4100 closing over $4400 on Monday’s bar.
- Price is being responsive to large round numbers (ie. 4100, 4200, 4300, etc.)
- After Monday’s dramatic moves, the price has ranged between $4300 – 4600.
- Always in short.
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