There is a period every stock trader loves the most due to significant movements, increased volatility, and, possibly, big gains. Open your trading apps and be ready to act! Earnings season comes four times a year and we crave to share our expectations with you.
GOLD: wait, wait, and buy
2020-12-17 • Updated
Gold crossed the December highs of 1 875. By doing so, it entered the zone of two-month resistance reversing the losses of November. To complete the pattern, it would need to reach 1 900. That will likely happen in the mid-term, however, it is strongly advised to factor in the possibility of a downward retrace to 1 850 before or the area above it before an upswing takes the gold price to 1 900.
Therefore, tactically, it is advised that you wait and watch so far. The current bullish rally has been pretty powerful and may exhaust itself at any moment. When that happens, gold may into either a flattening period or retrace downward. A correction to the zone of 1 850 – 1 860 seems more likely. If that happens, that will be the recommended moment to enter the market.
Now, strategically, the channel 1 875 – 1 900 is the upper frontier of the five-month downtrend gold has been in since August. Most of the time, it has been trading below the primary resistance. However, the October high of 1 960 created a reference point to believe that there may be a secondary resistance – which is where the gold price may be aiming at. In any case, that just adds momentum to the potential of a bearish reversal: crossing the five-month resistance zone requires some effort, and even if 1 900 is reached in one shot, it will likely send the price downwards before it comes back up again.
Last week marked the consolidation for the most active assets of March 1-15 (which is oil and gold). But next week has a lot to show, be ready to take part!
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