This Gold Decline was Expected

MANY EXPRESSED SHOCK AT GOLD’S RAPID DECLINE, BUT, READERS HERE KNEW THIS WAS COMING

On several occasions in posts past I’ve written about how GOLD has not been in an upward price trend for well over a year or more.

I’ve been watching to see if a recent upswing in commodities in general would catch GOLD in it’s net and take it further upwards, but, once it broke out of the selling area shown on the chart below, I wrote off Gold as an upward moving candidate.

That was a long shot possibility anyways as market makers have been quite successful with GOLD staying within their Game Plan over the past year.

Everyone’s been worked between two price regions by the market marker’s of the GOLD market. The chart below shows the upper and lower price areas I’m writing of.

Trading the GOLD markets using the Excalibur Method

Trading the GOLD market price bands.
Chart courtesy of Finviz.com

Of course, the public and the media keep promoting the necessity of buying and owning GOLD.

This can be wise when GOLD is viewed as what it really is: an insurance policy of last resort in a collapsing economy; however, it isn’t a wise recommendation when GOLD is viewed for what it still remains in our day and time; a COMMODITY.

A commodity, I might add, that’s just recently come off it’s peaks (view the chart).

Commodities rhythmically oscillate from high extremes to their low extremes and then, repeat. That’s their nature and also the nature of their demand cycle.

We’ve just come off from the top price area and are now descending, quite naturally, towards the lower price area of the BUY band established over the last year or so by market makers with longer-term profit perspectives. These guys are not day-traders.

Quite the opposite.

They’re quite content to take the $200/oz. profit from the middle of this range on tens of thousands of contracts (I leave the math to you, but, make sure your calculator has plenty of digits for the profit answer!).

While prices may not go directly to the bottom green band shown on the chart, this target price area gives us a downside parameter and sense of the GOLD market price game.

Once we knew we were in the upper band of prices, it was only prudent to watch for short side opportunities to arise. There was obviously far more downside potential than upside so the reward to risk was skewed strongly in favor of a bear market.

Knowing that, one could be prepared for such events as being the most opportune ones to target.

You can see that on the 5-minute chart below. What we’re looking for is the first signs of weakness in price structure (which is shown on the chart as the green rectangle with the red circle around it.)

short-term intraday GOLD trading using the Excalibur Method

Chart courtesy of Finviz.com

This is a recent example on the short-term, but, as you’ll note from the first chart, this one, you could see coming from quite a ways back and higher in price using the right tools. - George

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A reminder: These posts are purely for educational purposes only concerning my own private methods of analysis and are not recommendations or advice to buy or sell or to really do anything except to observe, along with me the rhythm of market price movements and try to align ourselves with them.