Monday, February 25, 2019

Gold: Safe buying zones and fears of a bursting US and European stock bubble


Over the past 30 days we can see clearly the direction of major funds to increase their holdings of gold, which did not retreat during that period from its peak close to the 1345 little until now, despite the Italian government announced its intention to sell Italian gold to cover the budget deficit
The reason why the Italian government's emotional comments on gold prices may not have been influenced by traders is that Russia, for example, is waiting for any commercial quantities available for purchase, while China does not hide its desire to increase its holdings of gold while it is clear that even from within the European continent Clear to buy gold even against the euro, which reached the price of gold against the euro to the prospects of the 1190 before retreating slightly towards the 1160, which we do not trust as an appropriate level either to buy or sell


However, despite the recent declines in gold against the dollar, we can not even look at it as the end of the gold trend against the dollar. Gold retreats towards the 1320 areas are not enough to make sure that the trend towards buying gold is over. To gold during the last period, which means that there are fears of the bursting of the index bubble and US stocks, which may also hit European indices and stocks

Of course, we are facing a unique situation in the US economy: a president who wants a weak dollar, strong indicators and less gold holdings in the face of a federal bank trying to raise interest rates and a democratic bloc that rejects all the economic trends of the president and investigations that may affect the president himself after many members of his team or employees With him

In America, we have a president who might lose his job (a possibility that remains theoretically possible) and a federal bank is going against the economic vision of the president. A democratic bloc is doing its best to thwart anything that belongs to the president
Are frightening elements for stock traders and indicators who recognize that Trump has turned himself from the beginning of his presidency to a "drive forward" for US indices and bonds and considers their rise to be an achievement and therefore the threat to the president has become a direct threat to those indicators and stocks

In Europe it is not so clear, but it is also complex and open to all possibilities, starting with the French yellow jackets that may haunt the French president, the rude Italian government, the long and boring British exit and not the end of the Spanish troubles

All of these factors are a support for gold, but in light of all this, we can not abandon technical standards when we go to buy gold

Trading Recommendation
On the 4 H chart we find that gold has strong support at 1322 while the strongest resistance is 1340 and between the two regions can move gold up and down influenced by news or statement or even depending on the deals of small traders and their tampering with markets
But if we look at the RSI we find that it is currently negatively inclined while gold kept trading above the 50-day average, but it can concede at any time, which could push it quickly towards support areas 1322 which will represent a fragile line of defense and break it will have an impact Myself may push gold to retreat towards 1295

Therefore, we do not prefer to get involved in the markets at present not to sell and buy before the vision becomes clearer, but for traders with small targets they can trade and until further notice as follows
Put outstanding orders for sale from 1345 levels with a profit at 1335
Put pending orders to buy from 1322 levels with a profit at 1330

For traders with great targets, there is nothing tempting to enter the gold market now and we will follow the movements of gold throughout the week before we decide how to deal with it during the next week

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