As you know very well I’m a long-term Gold bull. If you have been reading my daily analysis on Gold you were clearly notified ahead of the levels this pull back could reach. The scenario of a deep pull back towards the 61.8% Fibonacci retracement was one of my first scenarios once Gold topped at $1,375. There were signs during the entire decline that Gold made impressive bounces but each time Gold price got rejected at important resistance levels and did not confirm a breakout. My longer-term target for Gold is at $1,450-$1,600.
Gold price has reached the Ichimoku cloud and the 61.8% Fibonacci retracement of the entire rise from $1,045. The last time I was ‘screaming’ Gold is bullish was back at $1,100-1,050 back in 2015. Now I feel again the same way that we are in the process of making an equally important low. There is no reversal signal yet and conservative traders should be patient. Dollar weakness will be the first sign to signal a move in Gold.
The monthly chart shows us why we stopped at $1,375 and why the post election high rejection was also important. Both got rejected at the Ichimoku cloud and at the black downward sloping trend line resistance. However this was necessary for the wave 2 down to complete. Crowd mentality is again very bearish something usual for 2nd waves. Gold price should now start to reverse. Even the monthly stochastic is shaping up similarly to the start of the old rally at 2001-2002.
I will know I’m wrong if Gold price breaks below $1,045. I will be thrilled to see Gold price back above $1,340, and I will become optimistic if Gold breaks above $1,235. Good luck to all and thank you for taking the time to catch up on my thinking.