Mentari Mulia Berjangka

LIPUTAN MEDIA

Gold oscillates and consolidates at the high level or prepares for breakthrough at the 2000 mark

Blog Single
Gold oscillates and consolidates at the high level or prepares for breakthrough at the 2000 mark, yet still need to beware of “high level trap”!
Independent Analyst: Ling JianQi


Fundamentals:
US Secretary of State Pompeo said on Sunday that President Trump will announce in the “coming days” with new actions against Chinese software companies deemed by his administration to pose a threat to US national security. Pompeo told FOX News that Trump will issue a statement on the matter “soon”.

The latest news shows that US President Trump required TikTok to be sold to US companies before September 15 or it will be forced to close; video conference platform Zoom announced that will stop selling software and upgrade services for Chinese users; in addition, China and US may have new conflict broke out at the short term in the media filed.

In addition to the poor China and US relations, the current dilemma in the US congress’s stimulus bill is also the reason for the high risk aversion in the market. It is reported that due to the huge differences between the White House and Congressional Democrats in the discussion of reaching a new round of bailout agreement, the Trump administration is considering potential “unilateral actions” to try to resolve some fo the economic consequences of the COVID 19 pandemic.

Currently, USD is continued weakening as a safe haven currency, which is the main driving force behind gold’s continuous high records. Market expects for further relaxation of US monetary policy and the lack of consensus on further fiscal stimulus by the US congress, couple with the decline in US bound yields, may cause the dollar to continue weaken, which will help gold price maintain its upward trend pattern.

Technicals:

In terms of the weekly cycle trend, gold has maintained an upward pattern as whole, and the accelerated performance in recent weeks will help its inertial upward extension. In addition, if it is divided from the wave patter, it is currently only in the three-wave phase of acceleration, and the future will usher in a small market. The extension of the 5 waves and the establishment of the medium-term pattern will continue to attract mid-line buying interventions, which will help gold maintain its volatile upward expectations and performance.

On the construction of the daily chart, the recent rapid release of gold’s volume was triggered by insufficient market liquidity. After the completion of the test around USD$1451/oz, the gold price was supported by cheap covering buying, and then a V-shaped reversal occurred. The structure establishes the return of the upward trend; afterwards, the regional shock platform is constructed to show a relay-like structure, and then the extension of the accelerated sub-high-level upward market appears. After completing the test and challenge near USD$1984/oz, the superposition space is basically consumed. The evolution will determine whether a new stage of trend wave market can be formed!

At present, although gold price has completed the breakthrough of $1,984/oz, the extension is not large. After that, there is a quick adjustment and retrace. It may refer to the lack of confidence in the upscale follow-up values, plus there are more error correction effects near the 2000 integer psychological barrier, as a result the vested interest effect of the challenge of gold price is apparently weakening. It is even possible to set up “traps”. Investors are kindly advised to participate carefully.

Just like the time that the gold price hit the 1000 integer psychological barrier for the first time, at the time the gold price broke through downward the 1000 integer threshold. After it really effectively broke through, the extension was only $20-$30. After that, the continued upscale close position led to a longer period of adjustment and retrace. This is somewhat similar to the current upscale turbulence below the 2000 integer of gold price. In addition, the period and the space of the wave-shaped wave 3 is long and big enough, we have to beware of the possibility of the gold price to be extended and the wave 4 to be corrected in a larger level!

Moreover, the most important thing is that we need to focus on the USD. If the US dollar reach to the bottom and rebounds apparently, the advantageous price will be highlighted due to the cheap purchasing ability and the risk-avoidance investment. The risk-avoidance requirement for gold will be weaken. Investors are kindly advised to carefully follow the uptrend challenge of gold price, and investors can try upscale trade at the right time.

Strategy:
1. Sells in the range of 1980-1987 cautiously, stop loss 1992, target 1950-1970.
2.Sells in the range of 1998-2005 cautiously, stop loss 2010, target 1965-1985.

This article also covered in the Guo Ji Ri Bao newspaper issued on August 5, 2020.