Yahoo Finance Gold “Does a Bitcoin”
We showed the chart below to the office yesterday.
We took off the labels that said what it was, and the scale – for the sake of fairness we left the dates. – and then we asked everybody what “trade” it was.
There must have been twenty replies – and only two got the right answer!
Most people thought the chart was of some whizzy cryptocurrency, others that it was a hedge against the dollar. This is the chart:
This chart is actually the daily chart for gold since the beginning of December.
In all the furor and excitement of the madness surrounding Bitcoin, Ethereum, Ripple, and all the other stars of the crypto universe, gold seems to have been forgotten by all but the most shrewd investors.
If we look in more detail at the chart we can see what has happened – and where gold is likely to be headed now – into the new year.
Back towards the end of November, last year, gold had been slowly climbing towards the psychological $1,300 level, which it reached, at 1). Unfortunately, the resistance was too great and the bears were in control of the market at this point, on the back of the astounding rise in Bitcoin and the other cryptocurrencies. Gold then tumbled back down to $1,245, at 2).
Cryptos, Bitcoin, in particular, were taking their first blows at this point, with several governments, China and South Korea, being the most prominent, saying they would be clamping down on the mining and exchange operations in both countries. It was on this news that gold began its new rally.
It reached and pushed through, the $1,300 level just after Christmas – with a slight retrace – and a wobble – at 3) rallying strongly into 2018 to reach over $1,350, at 4). The 21-day EMA (blue line) at 5) is tracking sharply upwards again – and there is a healthy gap between it and the gold price. This will be the first point of support in any retrace. The 55-day and 100-day EMAs are also beginning to turn upwards – again, consolidating any support which results from a retrace, at 6).
In terms of indicators, the 14-day ADX, at 7) remains strong and above the positive 14-day DI, at 8). This, in turn, is showing steady, strong, performance, and remains several points above the negative 14-day DI, at 9. This is the perfect combination for a continued rally.
The momentum indicator, at 10) turned into positive territory on 2nd January, and has steadily climbed to its current level, at 11) showing a high, positive bar.
So – what does all this tell us? Gold has seen a sudden resurgence in its price. As yet there is nothing to show a sudden, or immediate downturn. There is strong support at the moment, and the bulls seem to be in charge. After every such rally, there is always a retrace – and although there are no signs of this at the moment, it is important to keep an eye on the news and the charts for any signals which would start such a retracement.
We would view a fall to the 21-day EMA as a strong buying opportunity, as we see gold climbing higher on the back of the uncertainty in the cryptocurrency markets. Should gold close below the 21-day EMA, we would need to revisit this view.
Gold has got off to a flying start so far this year-long may it continue …
Noble Gold specializes in IRAs and 401(k) rollovers through precious metals and cryptocurrencies investments.
This article was originally posted on FX Empire
