I am bullish on Gold and have been looking for buy price action for some time. It seems like it’s here.
A double bottom pattern with a bullish Morning star pattern on the Daily chart is bullish by the current technicals.
On the weekly chart, I was expecting the price touches the 1600 – 1555 level as the potential buy zone. Well, swing and a miss. The price failed to create lower low and reversed before touches 1610, which is ok.
What are the risks of buying gold position?
– Aggressive Fed tightening resulting in a strong USD could choke the Gold price.
– Strong earning reports good for stocks and bad for Gold
What could impact the Gold price positively:
– the US gets into an outright recession, which could force the Fed to pivot, that’s good for Gold and still not so great for stocks. (The valuations may stop falling, but the earnings will be disappointing which is not bullish for stock.)
In conclusion, Gold is still far from being the risk-free long position. Still, I like Gold due to the economic conditions where Fed may be forced to pivot on their monetary tightening due to liquidity problems in Treasury markets.
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