Gold And The Era Of Rising Interest Rates

Aibek Burabayev - INO.com Contributor - Metals


The U.S. dollar is the primary benchmark for the expense of the time value of the money around the world. It affects all asset classes, and I want to analyze it to see if the speculation about the coming cycle of the rise in interest rates is valid or not.

The wise trader once said; “if you want to know the market trend just squeeze the chart to see the perspective.” I used that advice to focus on the long-term perspective, and in this post, I would like to share the result of my research in the three graphs below.

Chart 1. The Yield Of 10-Year U.S. Treasury Notes Quarterly: Downtrend Could Be Over Soon

Quarterly Chart of 10 Year U.S. Treasury Notes
Chart courtesy of stooq.com

The chart above shows the history of the yield on the 10-Year U.S. Treasury notes (UST) from 1980 to present day. I chose that period to highlight the whole move down of the yield from the top in 1981 at the 15.84%. I chose this instrument as it is a benchmark showing investors’ sentiment about the future interest rates for the U.S. dollar. Continue reading "Gold And The Era Of Rising Interest Rates"

Gold & Silver: Gold Breaks Up As Silver Licks Wounds

Aibek Burabayev - INO.com Contributor - Metals


The broad weakness of the U.S. dollar supported precious metals and currencies. Gold has been saved from silver's Flash Crash destiny so far. Below are the updated charts for gold and silver.

Chart 1. Gold Daily: Breaking Upside

Daily Gold Chart
Chart courtesy of tradingview.com

The experimental clone chart for gold that I posted in April amazingly finished its move down as planned although later than expected. The anticipated reverse to the upside followed the end of the consolidation highlighted with the gray rectangle. Continue reading "Gold & Silver: Gold Breaks Up As Silver Licks Wounds"

Gold & Silver: Time Machine

Aibek Burabayev - INO.com Contributor - Metals


The Time Machine is the dream of many (especially those who bet on sports) and I’m excited to see if we will be able to travel through time shortly as physics scientists confirmed that it is possible. In the meantime, we could profit or at least be prepared for the future using the market’s time machine.

Last week a textbook example of a “Flash Crash” occurred in the silver market when the price dropped almost 2 dollars (10%) within a minute! It’s amazing that gold was untouched by this event creating an arbitrage opportunity as all discrepancies are subject to speculative trading. That’s why I put the silver analysis first this time to show the map for a possible gold move. By the way, it is quite often that silver is the principal instrument for market movement as it has less liquidity and therefore more opportunities for market “gangsters” or “pirates” to attack it.

Chart 1. Silver Daily

Daily Silver Chart
Chart courtesy of tradingview.com

After silver breached the previous major low established last December at the $15.64 mark the map has changed. What was tagged as a first move up turned out to be a tiny countertrend conjunctive move within the small complex correction contoured with the red downtrend. The Flash Crash drop almost reached the downside of the red channel, which could finish that small complex correction. Continue reading "Gold & Silver: Time Machine"

The Gold Clone: Time's Up

Aibek Burabayev - INO.com Contributor - Metals


Last week time ran out for the clone of the previous consolidation in the gold chart that I posted in April. I’ve updated the chart with a snapshot of the experiment’s result.

Snapshot Of The Experiment’s Results: Good, But Not Ideal

Gold
Chart courtesy of tradingview.com

All experiments are some sort of magic as we have an idea in our mind and try to apply it in the real world through an uncountable series of experiments to reach the desired result. But any result is a step forward to better understand what is going on in the real world. And the many side effects can bring us something genuinely new, especially when the experiment brings you an unexpected result. Continue reading "The Gold Clone: Time's Up"

Gold Faces Multi-Year Resistance Again

Aibek Burabayev - INO.com Contributor - Metals


Monthly charts show major price development and are crucial in determining the long-term trends. It is slow to change and I update it once the price reaches the important level or makes a breakout or reversal. The last time I updated the monthly chart was last August when the price reached the multi-year trendline resistance.

I had assumed three possible scenarios of price action and the least interesting second scenario of consolidation plan worked. I had set the margins of consolidation within the $1100-1400 range and some readers thought it was too wide, but as you can see now it played out perfectly – the actual range is $1122-1367 for the past period.

The trendline resistance falls lower and lower in the long run and now the price meets it again. That’s why added an updated monthly chart below.

Chart. Gold Monthly: Crossroads

Monthly Gold ChartChart courtesy of tradingview.com

This time we have the same situation as in the past year. Last July the price had tried to push through the black resistance line, but failed and there was hope that in the next month the breakup could be done and we all know what happened next. Last month the price also tried to overcome the barrier but failed. Nevertheless, the hope is still there as always in such situations. This month’s candle tells us that the price first dropped down from the open at $1267 to $1214 low and is now reversing losses and is yet to cover them all. Continue reading "Gold Faces Multi-Year Resistance Again"