The golden bulls are loading 2020-05-18 07:36:32

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Golden bulls


Gold bursts

I have been working on gold for a few weeks now. See here and here. The inner bar rolled up on the daily chart was a key gift that God was going to break. Now, we didn’t know which way it was going to break, but the fundamentals of gold were solid, which is why I wrote on May 7 that an option was to buy at the market and seek a break. . With a sufficiently wide stop, the thought was that a false (down) break in the spool would likely find buyers:

You can buy a gold ETF. This avoids the problem of leverage if you buy real money. Another option would be to dip your toe here with stops below $ 1,636 and seek the break.

Please note that whenever you see these coils forming, the price prepares for a strong break:

gold

So, for those who have long gold or who want to go long, the case of gold bulls still remains in place. Here is a brief overview of some key points for the bullish case of gold:

1. First, we have central banks that cut interest rates and head down to zero or down. The Swiss National Bank, the European Central Bank and the Bank of Japan currently have negative interest rates. For many countries, where inflation levels are higher than interest rates, money in the bank will simply lose value year by year. Therefore, investors who have opted for cash will seek to place their cash in a safe place. Discover this practical explanation on the impact of interest rates on gold prices here.

2. Over the past three recessions, gold has increased in value, so that a cover for a recession has a strong appeal for gold.

Gold bursts

3. In addition, with the large-scale quantitative easing (QE) programs undertaken by central banks around the world and some analysts concerned about high market valuations, gold offers a hedge against this devaluing risk. QE devalues ​​a currency, so money literally loses value. This is why many analysts recommend having part of your portfolio gold. History may not repeat itself, but the fundamental outlook for gold is currently very solid.

Expect gold buyers starting at $ 1,740 and under.

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