Upon completing the move up to 2069.94 in order to fill a gap generated on August 10, 2020, gold will now start a decline that is expected to last until the end of 2022. This move will ultimately take gold down to 1418 prior to starting a long term move up.
Gold: Filling Gaps
In addition to reaching 2027.95 in the overnight futures market, gold still has a gap to fill that was generated on August 10, 2020. This will require a move up to 2065 prior to moving lower.
Gold: 2027.80
As noted on March 7, 2022, gold was expected to hit 2027.95 before starting a decline. In overnight futures trading gold hit a high of 2027.80 and is moving lower.
Gold: The Peak
Preliminary futures structural calculations indicate that when gold hits 2027.95, that should be the peak when oil, gold and silver start to turn lower.
Gold: Decline Expected
Gold spiked on February 24, 2022 with a high of 1974.04 leaving a long upper shadow candlestick formation. Intermarket futures trading data and structural calculations indicate gold is in the process of starting a decline that is expected to be similar to that of April 11, 2018 to August 16, 2018. Preliminary calculations show a drop to 1399 is expected.
Gold: Sharp Decline
Daily engrbytrade™ Gold calculations indicate a sharp decline is expected to start within the next seven trading days. Calculations also show this decline has the same characteristics and potential as the drop between July 28, 2021 and August 9, 2021.
Gold: Decline to 1680
Stock chart courtesy of StockCharts.com.
Daily engrbytrade™ Gold calculations indicate gold is positioned for a decline as it moves through the descending triangle shown above. This decline is expected to be similar to what occurred between June 4, 2021 and June 18, 2021 with a move down to 1680.
Gold: Descending Triangle
Stock chart courtesy of StockCharts.com
Futures trading data indicates gold is positioned for a decline as it moves through the descending triangle shown above. A price move to 1435 is still expected before moving higher.
Gold: 2008 Chart Structure
Gold vs. dollar structural data calculations indicate gold is repeating the March 2008 to November 2008 chart structure on a much longer time frame during 2020 and 2021. The current structure started on August 7, 2020 with a high of 2075.11. As of July 23, 2021 gold reflects a similar structural position to where it was on July 28, 2008. This was just prior to the stock market collapse in 2008. Gold is expected to be extremely volatile during the last half of 2021 as it moves lower between July 2021 and November 2021. A price level of 1435 is expected by November 2021 before moving higher.
Gold: Deflationary Forces
On June 8, 2021 it was noted that a move up in gold to 1942.50 was expected prior to turning lower. With the Federal Reserve’s discussion today of raising interest rates by the end of 2023, this confirms their intent to strengthen the U.S. Dollar. It also aligns with a peak in the price of gold against the British Pound and Canadian Dollar, as discussed in the Gold post on June 5, 2021. At this point gold is expected to have a repeat performance of October 2012 to December 2015 where significant deflationary forces will drive the price of gold much lower over the next three years.
Gold: Decline in 2021
In the futures market, a move up in gold is expected to reach 1942.50 (+/-1%) prior to turning lower. Based on intermarket futures trading data calculations, a decline is planned for the next several months with the goal of reaching 1424 (+/- 1%).
Gold: Position of Gold
On May 25, 2021 it was noted that the position of gold against its current relative value with the U.S. Dollar was part of a calculation indicating a decline in gold is expected. In addition to the U.S. Dollar calculation, the position of gold to the British Pound and Canadian Dollar are now showing a 90% chance that gold will decline. The last time this occurred was in September 2012.
Gold: 2011-2021
Chart courtesy of StockCharts.com.
Additional data indicates a decline in gold is expected after reaching the 61.8% retracement level shown in the weekly chart above. This is based on calculations showing: 1) Commercial Traders positioning for a decline, 2) Non-Commercial Traders accumulating significant long positions as well as their sentiment that gold prices will continue much higher, and 3) the position of gold against its current relative value with the U.S. Dollar. This also aligns with the post on May 22, 2021 noting that the Dollar is being positioned for a move higher in 2021.
Gold: Short Positions
As with silver, calculations continue to indicate Commercial Futures Traders hold significant gold short positions with the expectation of a decline. There is a 60% chance gold will have a repeat performance of the May-November 2008 decline based on Dow key events discussed in the May 12, 2021 post. Using the 2008 decline model would take gold down to 1424 (+/- 1%) prior to moving higher as it did between 2009 and 2011.
Gold: Current Price Structure
The current daily price chart structure developed between August 7, 2020 and March 18, 2021 is 2.52 times longer in duration than a similar structure that was constructed between August 26, 2019 and November 20, 2019. Based on futures trader positions and expectation of a sharp decline in the Dow by May 5, 2021, gold is expected to follow the pattern of the 2019 price structure. A move up to 1950 prior to dropping to 1517 (+/-2%) would align with the March 3, 2021 post.
Gold: Long Term Trend
Stock chart courtesy of StockCharts.com.
The chart above provides some perspective on long term projections for gold. Commercial Trader positions indicate they are in the process of moving gold down to the red trend line. A decline below 1517 (+/- 2%) is still expected. Based on underlying futures trader positions, long term calculations indicate the current trend is expected to be a repeat performance of 2000 to 2011. Note that the trend lines start in the early 1800’s.
Gold: Long Term
Stock charts courtesy of StockCharts.com.
Underlying gold trader positions along a 30 year timeline indicate futures traders are adjusting their positions at a faster pace than what occurred between October 1999 and April 2001. The falling wedge formation shown above provides an illustration that a long term low is near. The decline discussed on February 6, 2021 is still expected to occur and should be brief, as it was on February 16, 2001, prior to moving significantly higher over the long term.
Gold: Minor Change
Designated Market Makers and Commercial Futures Traders gold positions remained relatively unchanged with the recent spike in silver prices. This trading activity resulted in a minor change in the engrbytrade gold model structure showing an expected decline to 1469 (+/- 2%) by February 24, 2021 (+/- 1 trading day) before moving higher.
Gold: Significant Short Positions
Commercial Futures Traders still hold significant short positions in gold, and in concert with the media, have driven retail customers into acquiring significant long positions just as they did in mid-2016. While gold prices drop to align with global currencies, retail investors will find their profits evaporate quickly. A decline to 1517 (+/- 2%) is still expected by February 16, 2021 (+/- 1 trading day).
Gold: Gold Structure
On January 6, 2021 Commercial Futures Traders completed a gold structure similar to what occurred between June 11, 2016 and November 9, 2016 as Market Makers continue selling short and distributing gold shares to retail investors. A decline to 1517 (+/- 2%) is expected by February 16, 2021 (+/- 1 trading day). Upon completion of this decline, a steady move upward is expected to occur between 2021 and 2025 based on structural relationships with Commercial Trader positions in long term bonds.
Gold: Decline in Gold
The expectation for a decline in gold has not changed. Market Makers continue to sell short and distribute gold shares to retail investors in preparation for this decline. Commercial Futures Traders are currently positioned for a decline in gold with a price target of 1517 (+/- 2%) by February 11, 2021. Upon completion of this decline, a steady move upward is expected to occur between 2021 and 2025 based on structural relationships with Commercial Trader positions in long term bonds.
Gold: 2016 Algorithm
High Frequency Trading machines are in the process of using an algorithm that contains a similar instruction set developed between July 8, 2016 and September 23, 2016. As this algorithm continues to run, with the current rate of change, gold is expected to reach 1674 (+/-1%) by December 24, 2020.
Gold: Decline Continues
Based on Commercial Trader plans to accumulate gold, as noted on November 17, 2020, calculations indicate a decline in gold is expected to continue and reach a price level of 1650 (+/- 3%) prior to a long term move upward. The rate of acceleration indicates a low will be achieved in January 2021. Volatility will continue to increase.
Gold: Process of Accumulation
As noted on October 24, 2020, Commercial Traders have developed a structure that brought gold back into alignment with the U.S. Dollar. The long-term process of accumulation has resumed with a price target of 2700 in the last quarter of 2021.
Gold: U.S. Dollar Alignment
Commercial Traders are developing a structure that will bring Gold back into alignment with the U.S. Dollar. A decline in gold is expected to start by November 2, 2020 (+/-1 trading day) and reach a price level of 1650 (+/- 10%) prior to moving higher. As the U.S. Dollar moves higher, currencies such as the Euro, Australian Dollar, British Pound, and Canadian Dollar are expected to decline.