Gold, Long Term Top?
At the end of October, before the US presidential election, we specifically pointed out that gold had reached the medium and long-term target position, and it was time to take profits.
At that time, the price of gold was around 2750. Although there were higher highs afterwards, looking back now, it was obviously a suitable appearance. In addition to price changes, more importantly, short-term and medium-term trends, and even long-term structures, gold shows obvious signs of loosening.
First of all, from the perspective of the weekly situation, gold broke through the swing low last week, which was the first time since the autumn of 2023, when gold had not yet set a new record high. Generally speaking, if this low point is no longer gradually raised, it means that the obvious rally has stopped. If you further observe the daily line, it is not difficult to find that,Gold has fallen below its 10th and 20th lows in a row of $200. According to trend theory, it is also a clear bearish signal.
Secondly, the Biden Troika theory that we have been emphasizing, and the historical position of gold as the anchoring standard has ceased to be effective with Trump's re-coming to power. Even if Trump himself does not represent a definite signal of rise and fall for gold (during his last ruling cycle, gold also fluctuated upward), if the target price of gold is taken into account, the future weakness of gold will be a high probability event.
The last point that is overlooked may be that ordinary investors in the market and central banks have raised the allocation of gold to a higher level, which shows that if the price of gold still wants to rise, it needs more new funds to promote it.
From the perspective of cost performance, investing in gold at a high level will not be an ideal choice. As for whether gold will benefit if there is a big panic in the market or the risk of war, it will largely depend on the position of the gold price at that time. If it has been deeply adjusted, then the role of safe haven will play. But if it is at a high level, according to past experience, the first round of general decline in gold cannot escape.
Now that the trend change of gold has been clarified, we need to change our previous operations and ideas from Pingduo--Wait and see instead of looking for short-selling opportunities with profit-loss ratio. From a graphical point of view, if gold is reversed, it is expected to face greater resistance in the area of 2700-2750, and the price-performance ratio of the high point of the range is very obvious.
On the downside, the upper track of the early long-short intensive trading range of 2450 is expected to provide good support in the near future. If you test quickly, the short position should also consider flat short position.
In addition, during this wave of decline, compared with gold, silver's decline is only slightly ahead, which is not quite the same as the historical pattern. Therefore, in the subsequent rebound short-selling attempt, the priority of silver will still be higher than that of gold. For relatively conservative investors, the strategy of short silver and long gold can also work most of the time.
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