A look at monthly chart patterns

2020年11月25日

If we look at the monthly chart pattern, price action seems to indicate that we may be at the start of a bear market which will be confirmed if Nov closes below $1781. Now I know nearly everyone is bullish on Gold due to the expected stimulus In Dec or Jan and the expectations of higher liquidity but we had a stimulus in March in USA and other countries also had stimulus programs. Liuidity was also not an issue during this period of time but we still see Gold peaking and closing flat in Aug and continously falling after that. Having said that, the expected stimulus is nowhere as large as the March one (based on a Rep senate) and the stimulus packages of other countries are also not as large as previously and frankly liquidity has not been an issue since 2008.

So unless you are a long term investor who is enamoured with the fundamentals of Gold, caution is a must (avoid blindly shorting/longing Gold) as the market eats expectations for breakfast.

PS: If we look at the Silver monthly chart this becomes more apparent as we have a bearish engulfing candle in Sep and Nov is looking to confirm the trend.