Gold(XAU/USD) – Buy on dips!
Published on March 9, 2021
Overview
Gold (XAU/USD) is at an interesting juncture. The structure suggests that the top is already in place and we are moving down. However as we mentioned "interesting", here it is why :
- The rise from lows of $1045 until new all time highs doesn't show the characteristics of the bull market, rather has some traits of a bear market correction.
- The fall from the all time highs ( Aug '20) until today ( 9th March 2021) also doesn't show a classic fall pattern that is required to confirm the top is in place and we are now in the correction cum consolidation pattern.
Structure review
This is a follow up to our last update on Gold: https://mymarketstructure.com/precious-metals/goldxau-usd-what-and-how When we published the last update on Gold, price were trading and $1872 on Comex. Since then, it has fallen almost 10% and are now trading at $1678/79 levels at the time of writing this post. The price has so far in the structure and our interpretation of this structure so far has been correct. As stated before, the fall from the Aug 2020 highs is not concrete to say that Gold has made a long term top. As such, there is every reason that price may reverse and change trend from the current levels or by making another low near $1650 levels. See the chart below. You will notice that sloping downtrend channel may act as a strong support. From a structure perspective as well, the correction that started from $2089 can complete at these levels and then price can shoot back up to make new highs. As such, it is important to :
- To cover/book shorts if any.
- For going long : purchase Gold via ETF or leveraged ETF
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