Gold has been in a massive and brutal downtrend over the last four months! Initially my worst case scenario was a move down to 1,240 USD. After a short-lived bounce this support was taken out by the bears and gold moved lower and lower since early July...
On Monday this week the psychological support at 1,200 USD was taken out too and during the last three days the final capitulation in gold took place. But tonight it looks as if this massacre is finally over with a low at 1,160 USD. So far gold is up nearly 20 USD from these lows, leaving a nice reversal candle stick on the daily chart..
Considering that the large speculators are heavily short on gold, I think we will soon see a massive short squeeze, which could take gold back towards at least 1,210 USD, more likely to 1,240 USD and even backs to 1,295 USD.
Depending on how gold can improve its technical picture this will either „just“ be a sharp countertrend short squeeze or the beginning of a massive new up-leg that will take gold to 1,500 USD.
Unfortunately its too early to choose between one of those two scenarios…
In any case gold is buy right now and should at least post a nice countertrend rally towards 1,210 - 1,240 USD.
On Monday this week the psychological support at 1,200 USD was taken out too and during the last three days the final capitulation in gold took place. But tonight it looks as if this massacre is finally over with a low at 1,160 USD. So far gold is up nearly 20 USD from these lows, leaving a nice reversal candle stick on the daily chart..
Considering that the large speculators are heavily short on gold, I think we will soon see a massive short squeeze, which could take gold back towards at least 1,210 USD, more likely to 1,240 USD and even backs to 1,295 USD.
Depending on how gold can improve its technical picture this will either „just“ be a sharp countertrend short squeeze or the beginning of a massive new up-leg that will take gold to 1,500 USD.
Unfortunately its too early to choose between one of those two scenarios…
In any case gold is buy right now and should at least post a nice countertrend rally towards 1,210 - 1,240 USD.
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