Gold claws back above its 200-day moving average | The Gold Forecast

Gold claws back above its 200-day moving average

January 11, 2021 - 6:46pm

 by Gary Wagner

Friday’s dramatic $66 price decline took gold prices below their 200-day moving average for the first time since December 1, 2020. Even more alarming was the fact that after trading to a low of $1828, gold futures traded off the low closing at $1,836 which is four dollars below its 200-day moving average. Today we have seen an increase in volatility and an exaggerated range with gold opening at $1849, a mere $9 above the 200-day moving average, and then trading to an intraday low during the evening session of $1817 before recovering.

As of 4:48 PM EST gold’s most active February 2021 Comex contract currently up by $11.60 and fixed at $1,847.00. With all three major indices, the Dow, the S&P 500, and the NASDAQ composite trading lower on the day, and concurrently a strong selloff in Bitcoin, market participants have re-focused their attention on the safe-haven aspect of gold. Today’s price increase was strong enough to overcome dollar strength. Gold futures are currently trading up +0.63%, and the U.S. dollar is up +0.48% currently fixed at 90.485. This means that had we seen a neutral dollar today gold would have gained a total of 1.11%.

Many analysts including myself believe that Friday’s strong selloff in gold was magnified or exaggerated possibly reflecting a rebalancing from gold into Bitcoin as the cryptocurrency broke $40,000 per coin for the first time in history. On Friday BTC hit an intraday high of 42,611.00. Recent action in BTC took pricing parabolic, with last week’s range containing a low of proximately $28,000 and a high of $42,000. But as any market analyst will explain typically a market that moves up in a parabolic manner has that same strength when it corrects, exactly what occurred today. Currently the most active BTC contract (CME’s bitcoin futures) is fixed at $33,800 putting it down $5,720 (-14.42%).

Our technical studies have indicated the following levels could become major levels of support. The lowest of these levels occurs at the 50% retracement that is currently fixed at $1,768.60. Above that price point, the next level is the 200-day moving average is currently fixed at $1,840 just above that is the 38.2% Fibonacci retracement level created from a data set beginning in March when gold traded at $1,400 to the all-time record high of August 2020 at $2,088. While current gold pricing is close to the levels of support that we have spoken about the first strong level of resistance occurs at $1,869 which is the current 50-day moving average.

The fundamental events that took pricing to a new record high are still very much with us. They continue to shape and determine market sentiment. On Thursday President-elect Joe Biden will lay out his budget for the next round of fiscal stimulus in which he has warned that it will be in the multiple trillions of dollars. When added to the $4 trillion worth of fiscal stimulus allocated over two rounds by the U.S. Treasury Department the net result takes the United States budget deficit the largest amount in history. Also because of this recession, brought on by the Covid-19 pandemic continues to worsen even as vaccines are being rolled out globally. Then there is the potential, although remote, that Trump supporters will continue to wreak havoc with intel suggesting militants plan on storming capital buildings in every state next week.

Collectively these events will at best slow down the attempted economic recovery, and at worse could have the ultimate effect of a continuing economic contraction worldwide. It is for those reasons that the upside potential remains solid even though gold traded dramatically lower on Friday.

Wishing you as always, good trading and good health,

Gary S. Wagner - Executive Producer

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Gold Forecast: Proper Action

Yesterday and today at NY open we sent out a trade alert to buy gold and silver.

GOLD FUTURES APRIL: Entry at 1845 - 1859 . Place stop at 1813
XAUSUD: Entry at 1845 - 1857 . Place stop at 1813
GLD: Entry at 172.14 . Stop to follow on today's show

SILVER FUTURES MARCH: Entry at 25.42 - 25.46 . Place stop at 24.11
XAGUSD: Entry at 25.33 - 25.40
SLV: 22.95 . Stop to follow on today's show

long February gold @ $1890.00 and stop hit @ $1902.20, for a profit of $1202.00 per contract
long Forex gold @ $1886.00 and stop hit @ $1898 for a profit of $12.00 per OZ
long March silver @ $26.31 and stop hit @ $26.41 for a profit of $500.00 per contract
long GLD @ $177.26 and stop hit @ $178.00 for a profit of $0.71 per share
long SLV @ $24.67 and stop hit @ 25.00 for a profit of $0.33 per share
long February Gold Futures at $1860-$1866 and stop hit at at $1869. Average profit $600 per contract
long XAUUSD at $1856-$1862 and stop hit at $1866. Average profit $6
long March Silver Futures at $25.16 - $25.25 and stop hit at $25.30. Average profit $450 per contract
long GLD @ $174.12 and stop hit at $175.78 for a profit of $1.66 per share
long GLD @ $174.12 and stop hit at $175.78 for a profit of $1.66 per share
long February Gold Futures at $1830 -$1843 and out at $1850 for a profit of $700 to $2000.00 per contract
long XAUUSD at $1841 and out at $1850 for a profit of $90.00 per mini 10 oz contract
long March Silver Futures at $24.29 and out @ $24.40 for a profit of $550.00 per comex contract
long GLD @ 1$71.50 and out @ $173.00 for a profit of $1.50 per share
long SLV @ $22.30 and out @ $22.50 for a profit of $0.20 per share
Long December gold at $1899. Stop hit at $1918, for a $1900 profit
Long forex gold at $1896.00. Stop hit at $1912, for a $1600 profit
Long December silver at $24.21. Stop hit at $25.07 for a $4300 profit
Long GLD at $180.46 and stop hit at $176.42 for a loss of $4.04 per share
Long SLV at $23.23 and stop at $22.78 for a loss of $0.40 per share
Long December Gold Futures at $1926 and stop hit at $1907.30 for a loss of $18.70 per ounce
Long Forex Gold at $1922 and stop hit at $1903 for a loss of $19.00 per ounce
Long December Silver Futures at $25.13 and stop hit at $24.73 for a loss of $0.40 per ounce
Long December gold at $1890, out at $1909.30 for a profit of $1,930.00
Long December silver at $23.95, out at $24.50 for a profit of $2,750.00
Long Forex gold at $1883.68, out $1907 for a profit of $23.32 per ounce
Long GLD ETF at $178.03, out at $179.80 for a profit of $1.77 per share
Long SLV ETF at $22.66, out at $22.03 for a loss of $0.63 per share
Long December Silver (SI Z20) @ $27.07 - Stop hit @ 25.56 for a loss of $1.51 per ounce
Long GLD @ $183.91- stop hit @ $178.50 for a loss of $5.41 per share
Long SLV @ $ 26.33 - stop hit @ $23.53 for a loss of $2.80 per share
Long December gold (GC Z20) @ $1947.00 - Stop hit @ $1952 for a profit of $500.00 per contract
Long Forex gold (XAU A0-FX) @ $1939.00 - Stop hit @ $1944.80 for a profit of $5.80 per ounce
Long December gold @ $1956.50.Stop hit @ $1960 for a profit of $350.00 per contract
Long December silver @ $27.39.Stop hit @ $27.80 for a profit of $2050 per contract
Long forex gold @ $1948.55.Stop hit @ $1955 for a profit of $6.45 per ounce
Long GLD @ $183.57.Stop hit @ $184.36 for a profit of .79 per share
Long SLV @ $25.10.Stop hit @ $25.75 for a profit of .65 per share
Long September silver at $26.68. Our stop was hit @ $26.87 for a profit of $1000 per contract.
Long December Gold at $1955.50. Our stop was hit @ $1979 for a profit of $2350 per contract
Long Forex Gold at $1947. Our stop was hit @ $1967,52 for a profit of $20.52 per Ounce
Long September silver at $24.40. Our stop was hit @ $25.99 for a profit of $7950 per contract
Bought GLD @ $166.74. Our stop was hit @ $$183.00 for a profit of $16.87 per share.
Bought SLV @ $18.00 Our stop was hit @ $23.80 for a profit of $5.80 per share.
NUGT – we sold all shares and took profits of $33.19 per share
Long December gold at $1997, we covered the trade @ $2035 for a profit of $3800 per contract
Long Forex gold at $1977, we covered the trade @ $2017 for a profit of $40.00 per ounce

Gold Market Forecast

Today's recovery in both gold and silver were impressive. But what was most noteworthy was the fact that gold had traded under its 200 day moving average both on Friday, and then to a lower low of $1817 today before recovering and closing up $10 on the day. The recovery witnessed today was most likely a reflection of the selloff and bitcoin as well as lower US equity prices

. The key is that from what we are seeing today the major selloff on Friday might be in fact a one and done and if that is the case we will return back into rally mode fairly quickly. On today’s show we will detail and outlined what parameters we are looking for to trigger a by signal in gold and silver.

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