Ticker tape by TradingView

July 21, 2022

Gold Hits Our Key Price Level

Frank Cabibi

Gold dropped nearly 1% this morning before finding a bottom and showed signs of rejuvenation. Settling in the $1600s, the metal saw little to no momentum to the upside for some time. But now there could be a good reason for the metal to start moving back higher again.

Big Economic Slowdown

If the Fed continues to raise rates, output will fall. Because the central bank wants to hike more and more aggressively (from .25% to .75%) this will only increase the slowdown. Businesses will have to start spending less as the amount of layoffs climb.

Goldman Sachs predicts that the job market will come in much lower going into the third quarter. The US saw nearly 400K new jobs added last month, but now they think it will shrink by over half that to a mere 150K.

Non-Farm Payroll is still adding jobs but at a decreasing rate. One key thing that drives the gold market higher is a struggling economy, and this is what investors could be trying to price in.

There is the question, however, that the Fed may consider loosening their breakneck policy on raising rates, but chairman Powell has yet to say otherwise. He stated in his last meeting that him and the central bank have an unconditional obligation on this inflation curb.

gold

COT data still shows that big money is decreasing long contracts from last week, but this week might be showing something different based on price action. We can look at some trade setups to see when big money starts buying the metal again.

Gold Key Trading Level

gold
gold

The images above are the price chart of gold paired with COT activity. We can see that price and COT data are closely correlated. There is also a pattern with every time the metal hits our second price target. Institutions start pouring money back into the commodity and send price to the $1900s and $2000s. So with that in mind, we may start to see gold move higher from this area.

The metal fell down to the $1680s which has served as a multi-bottom level of support. Each time the price has dropped to these lows, there was an eventual shift that sent price much higher. As gold hits our second price target, it's starting to look more attractive. Should the Fed continue their rate hike pace, gold could very likely find some more upside.

Price targets we are looking at for the short run are $1719, $1750 and $1780. Heavy support sits at $1679.

A1 Edgefinder

FLASH SALE
Take 10% off the Edge finder using code "READER"
GET ACCESS NOW

want to see what we're trading?

Join The VIP Community!
Our entries, exits & analysis
Live Webinar Coaching
Trading Chatrooms
Strategy Library 
Exclusive Trading Guides
Use Code "READER" for 10% OFF!
JOIN NOWJoin FREE Discord
A1 Trading Podcast
Why Global Recession Is Still Likely

On Friday this past week, the United Kingdom’s Office for National Statistics released the latest reports on the UK’s Gross Domestic Product (GDP), a means of measuring economic output. It was revealed that their economy grew by -0.6% month-over-month, and -0.1% quarter-over-quarter, which entails a contraction for both timeframes. Although these numbers are less disastrous […]

Read More
Has Everything Changed for Major Pairs?

This week the public received startling news: on Wednesday morning, month-over-month CPI (a proxy for inflation) in the United States had unexpectedly remained static, clocking in at 0% whereas a moderate 0.2% increase had been forecast. Core CPI (which excludes food and energy prices) likewise came in lower than anticipated at 0.3% month-over-month, while Thursday […]

Read More
Buy Kiwi Now Before Rate Hike

Next Tuesday, the RBNZ will announce their new official bank rate which is expected to be 3%, a 0.50% rise from July. This hike will make it the highest yielding major currency on the market. Here is why you should consider buying the kiwi before Tuesday's decision as well as some strong NZD long setups. […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
VIP
Menu
homesmartphonelaptopmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram