XAU/USD & XAG/USD - Gold & Silver Traders Thread

I don't see any head and shoulders on the charts regular or inverse.

Gold back at support 1185. THis level will need to be breached and held first for further momentum down.

Next I am looking at 1165. Yet I agree six, we are likely done here for the day
and I expect just consolidation.


If you look at H4 it is clear once the channel broke the price dropped helped along by lessening fears of inflation today and other commodities OIL lower helping drag prices down.

I don't see how a change in leverage in one country will hit the high yielding currencies specifically and hard.

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NZD and AUD gave back almost three days of gain today while JPY jumped back to hit a high of 86 today.

EUR and GBP didnt fall by nearly as much. Someone explained to me today that indeed NZD and AUD are the favoured H Int Currencies for asians.

It is mid-month. Perhaps some people have started unwinding here or next week while NZD and AUD are at highs and infront of the 01AUG deadline.

JPY is only about 100pts away from the lowest low in the last 12 months.

I wonder if Japanese investors are also selling Au to cash in at these prices as we are entering a seasonal period where Au traditionally falls.

It might seem that the asian sessions are usually quiet but infact alot of trading is done on the asian commodity exchanges. You can trade precious metals, agriculture products etc all on the TOCOM.

Currently I am short on AUD/CHF.
I might as well be short on AUD/JPY.

Take the daily chart of the Dow and the daily chart of AUD/JPY.
They are VERY VERY similar - almost identical.
Now put up the daily chart for AUD/CHF

So AUD/JPY fell today. Was that anything to do with the Japanese carry trade?
NO it was nothing to do with the Japanese carry trade.

What you are looking at is a commodity currency paired against a stable, low interest safe currency.
AUD paired against CHF and JPY tracks the Dow.
CAD to some extent does the same - another commodity currency but more stable.

The movement of AUD/JPY tracks the Dow to the extent you could confuse the charts. Thus the movement of AUD/JPY has nothing to do with leverage legislation in Japan.

New Channel???

Here is an updated weekly trend chart for gold.
I have added various MAs - you can find their values in the top left of the chart.

On the lower trendlines how the higher moving averages run almost in unison to the trendlines. THis will provide some powerful support / resistance for the price in the upcoming weeks.

Gold has cooled off a bit as it usually does in the summer. We have had quite an explosive ride in the past months.

It seems inevitable that the price tests the 1166 area in upcoming sessions.

As the summer progresses and toward the end, the next Indian buying season will be upon us as well as bargain hunters looking to enter the market.

The recent strength of the Euro has helped to keep Gold in relatively small range. If the trends continue, I will expect Gold to resume it's inverse relationship with the USD at some point, shifting the Long XAU short USD trade overseas - from Long XAU short EUR as it unravels.

I am hoping to add some correlations studies over the weekend.

The weekly is important yet is hard to use for entering shorter term trades. SO,

Looking at the daily - we have entered a corrective period coming off recent record highs. Gold usually does not produce a high this late in the game and this to me is a representation of the change in open interest in the Gold Market. The Global appeal of Gold as an alternative to fiat currencies is gaining.

Looking at the past price action, it seems clear that the last major run up past 1200 to appx was a bit more abrupt.

- Notice Summer 2009 was slow and low. June and July were both corrective Starting late August we began that trend and in three months the price gained almost $300 from appx 950 to appx 1220.

Next we entered a corrective phase entered a range and formed a bullish symettrical triangle on the daily (about when this thread was started)

Breach of the bullish triangle produced our first recent record high around 1249, the price went on to produce record high at 1264 area an almost $100 correction. Keep in mind news and currencies (EUR tanking - Gold correlating to USD - etc)

After 2 attempts at a higher price as well as the Euro trade unraveling and inflation fears waning, we end up here in mid July correcting. Not really the biggest surprise.

However this last move was more steady and the price has gained substantially, currently around 1190. There is somewhat of a floor at 1050 with various trendlines and MAs offering support on the way.

The trick (as always!) will be to find where the next trend will end up.
On breach of daily TL at 1165 zone support will come in at around around 1145 both horizontal chart support as well as the 100 day MA.

Theoretically, a dip below the TL could easily result in explosive buying, as these tech levels and news are not set in stone.

The price could easily find further support at 1180. We will see. This corrective phase will offer opportunities to get in for longer term trades, on the road to
test 1300. I will be watching closely taking intraday trades.

The major trend up is still very much so intact thus I always short with caution. The goal is to find the next great area to start positioning for resumption of uptrend.

The chart has been rising parabolically - so this year's rise is steeper than last.

The big correction in gold came after the BIG psyche level of $1000 was hit in March 2008.
Did it trigger panic in the Central Banks? Probably.
The rise to this was steep.
The last biggish correction was when price spiked through 1220 towards the end of 2009. The rise to that was steep.

I played around with some fibs -

If you plot the swing low of April 2009 to swing high of November 2009, price pulled back to the 50% fib - to the pip almost.
Using this as as guide we might expect a price around 1153 which would be the 50% fib.
Remember the 50% fib is probably the most important fib level (even though it isn't actually a Fibonacci number!)

Yes! correct this 50% Fibo of the last Steep move up. I think you have the same chart,

TO A TEE.

I made lines at the Pivots I used one at the bottom and one at the top. I think your pivot low is lower than mine though.

The fibs are the 3 in the middle - Just look at the 50% fib and the subsequent PA.

I don't always use Fibs with Gold because unless the are on higher TFs they sometimes are easily negated. I don't think that Fibs are a main factor in Gold TA but rather an added indicator to help look at potential price movements entries and Take profit areas. Welp, nothing is perfect! They are a great tool though.

They do work well with support and resistance levels. Often with currencies my fibos pull right over S/R I have hand plotted!

This move is not over, we will correct a bit, then rise

Financial news as copied below (from zero hedge).

In the most surprising news of the weekend (so far), the IMF and the EU effectively suspended Hungary's access to the remaining funds in a $25 billion rescue loan package created in 2008 to prevent a financial meltdown of the country. The timing of this development is most extraordinary, as only a month ago Hungary served as ground zero for yet another scare that pushed European sovereign bond spreads to new records. The reason given for this dramatic, and very destabilizing action is that the nation must "take tough action to meet targets for cutting its budget deficit." Ostensibly Greece continuing to lie about its own economic deterioration is a necessary and sufficient condition for escalating IMF lauding. Yet, with Europe set to announce results of its Stress Test kabuki next week, the last thing the continent needs is a real liquidity crisis (or the threat thereof) to counteract the smooth talking bureaucrats dead set into hypnotizing the union into "all is well" submission ("and when I snap my fingers, the debt-to-GDP ratio will be back to 10%"). To quote Portfolio.hu: "Brace yourself for Monday, folks!"

My thoughts are that this news, being financial stress, COULD send the euro down again, whist the Main Markets are also heading south. Maybe this could give gold a boost again.

Alright then...

I have a long rolled over the weekend. entered at 1190...

Hope it reaps rich rewards

All Gold and Currency trader should read this I will quote some in the thread below and add a link ---> link HERE <-----
Fed's volte face sends the dollar tumbling
Rarely before have a few coded words in the minutes of the US Federal Reserve caused such an upheaval in the global currency system, or such a sudden flight from the dollar.By Ambrose Evans-Pritchard, International Business EditorPublished: 8:52PM BST 15 Jul 2010
"currency chief at HSBC. "We're in a world of rotating sovereign crises. The market seems to become obsessed with one idea at a time, then violently swings towards another. People thought the euro would break-up. Now we're moving into a new phase because we're hearing alarm bells of a US double dip."
Mr Bloom said a deep change is under way in investor psychology as funds and central banks respond to the blizzard of shocking US data and again focus on the fragility of an economy where public debt is surging towards 100pc of GDP, not helped by the malaise enveloping the Obama White House. "The Europeans have aired their dirty debt in public and taken some measures to address it, whilst the US has not," he said.
The Fed minutes warned of "significant downside risks" and a possible slide into deflation, an admission that zero interest rates, $1.75 trillion of QE, and a fiscal deficit above 10pc of GDP have so far failed to lift the economy out of a structural slump.
"The Committee would need to consider whether further policy stimulus might become appropriate if the outlook were to worsen appreciably," it said. The economy might not regain its "longer-run path" until 2016."

Now go read the rest.

Gold range could not be tighter...


No trades on XAU tonight - Med term Neutral ATM.

Playing - Majors except for yen. Lots of action!

simple maybe play for range,
Long above 1195
short below 1185...

Just a thought.

Already had a good night and don't want to push it.

I've set Short @1197

headfake?......

Hmm its broken down now - its under the lower wicks.
First obstacle is 1180 but 1166 looks likely today or tomorrow.

Shorted @ 1185

Enjoy the profit!

I am hoping for 1165

Judging by the breach of 1185, we should be set for 1165. I may add a short to hold till this level.

Price action is weak and we are in the summer months.

After this bearish cycle completes I will be looking to stack some nice longs for positioning to next high.

Silver has gone through the 150 ema on the daily chart.
It got down to 1750 which along with the 150 ema has acted as support for price since February 2010.
I can see silver briefly ducking under the 1750 line if gold as we suspect goes down to 1166.

Clearly there is linkage between gold and silver and gold looks like it has further to fall.
Get in near the bottom of a price cycle with silver and there is some real money to be made.