Recently, the price of gold has been rising all the way, and it has continuously hit the resistance of 1180. However, the risk of falling gold prices still exists. So will the price of gold fall in the near future?
The price of gold fell from $1,876 per ounce (31.103 grams) to $1,138 or -40%. Has the gold price bottomed out?
Gold has been in a downward trend since 2012
Since the price of gold fell below the 200-day moving average in early 2012, it is in a downward trend. At the beginning of 2016, when the price of gold broke through the 200-day moving average, there was a very good bullish signal. When the price of gold breaks through the 200-day moving average and the 50-day moving average, this behavior is called a gold cross in technical analysis. It is a bullish signal. But by the end of 2016, the price of gold fell below the 200-day moving average and the 50-day moving average. This behavior is called death crossover in technical analysis. I think this naming is enough to explain this performance.
For 15 years, my best friend has been tracking the relationship between the price of gold and the 200-day moving average. From 2001 to 2012, prices remained above the moving average, and I wrote an article about the bullish price of gold. Since the price of gold has fallen below its 200-day moving average, I am not writing anything. I don't want to write negative things about my favorite subject, the newspaper is enough. It has been 7 years since I waited for the bull market (April 14, 2009). Because nothing has changed for a long time. Still have a little patience with gold.
Gold price support
The $1,000-1,050 is a very strong psychological support. This price is lower than the production costs of many large mining companies. Buying in this price area is very good. Below $700, things are completely clear! Excellent buying opportunity! From a technical analysis point of view, it is up to you to choose this one or the other!
First support
The first support is between $1,000 and $1050. This support is also the old resistance level in 2008 and 2009. A break below this support will open the door to $700/oz.
Second support
We are not there, but if this happens, I will write an article titled "Buy, Buy, Buy." This is a buying opportunity that only occurs every 10 or 15 years (because the price of oil is less than $50!).
Let's look at the relationship between gold prices and oil prices. I like to have a safe margin and feel at ease. The price of gold has grown from 2001 to 2012. From the perspective of basic analysis, this growth is completely reasonable. For the extraordinary rise, in my opinion, under normal circumstances, we have to have an abnormal adjustment and the final stage of surrender. I have not seen the surrender of this final stage.
Don't underestimate the time factor
In the long run, physical gold must always be viewed from a long-term perspective. In the short term, I think casinos offer better chances of winning! If the $1,000 support level is in place, gold may run for a period of time in a horizontal channel, for example between $1,000 and $1,400 per ounce. For example 24/36 months.
No matter which price plan you prefer, be patient. If this is not part of your quality, get used to it, or you will do a daily trading of Forex. Goods are long-term. You have to wait for the bottom of the cycle and buy when everyone will tell you that it is stupid to buy.
All in all, we are already in a low price zone and may experience the last wave of decline. From the perspective of mining fundamentals, the last wave is unreasonable. But the price of gold is never reasonable.
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