Gold Update: Triangular Consolidation

Aibek Burabayev - INO.com Contributor - Metals


In the previous Gold & Silver update I warned you about the possible correction ahead. Indeed, both top metals showed weakness, but I didn’t think it would be that severe as we quickly reached seemingly distant supports both in gold and silver. Later I shared with you my concerns about golds outlook as the Fed starts cutting its massive balance sheet this month. This could be a real game changer as market wizards call for another perfect storm for the financial markets. In the charts below I try to model this change for you.

I would like to start with the U.S. 10-year Treasury notes (UST) chart as this instrument has a strong relationship with gold, which I already showed you in August.

Chart 1. U.S. 10-year Treasury Notes Daily: Bear Flag Works Out

U.S. 10-year Treasury Notes Daily
Chart courtesy of tradingview.com

Above is an updated and zoomed in chart from my last post. I chose a daily time frame to focus on the tactical move to see how the chart structure of the instrument develops over the time. Continue reading "Gold Update: Triangular Consolidation"

Fed Takes On Gold Unintentionally

Aibek Burabayev - INO.com Contributor - Metals


In my previous Gold & Silver post published earlier this month, I promised to update a long-term chart of Gold as I observed some interesting price behavior in a related instrument. But before I do that, let me speak about the Fed’s decision last Wednesday and that “related to gold” instrument first.

The positive dynamics of the US economy underpinned the Fed’s decision to finally start to trim its huge balance sheet next month, besides that there is a big chance of another rate hike this December. It wasn’t a shock to the market, and some big players already started their game weeks before the Fed moved from rhetoric to action.

The Fed’s decision could have a double impact on US interest rates as falling US Treasury notes increase the yields, and the impending rate hike could secure that situation. I was writing about the high possibility of this almost a month ago and last Wednesday we received a first-hand confirmation from the Fed. Continue reading "Fed Takes On Gold Unintentionally"

Gold & Silver: Beware Of Correction

Aibek Burabayev - INO.com Contributor - Metals


What goes up should come down. The precious metals are in a good bullish move, but one should be prepared for the possible downside corrections ahead as the natural phases of market cycles change again and again.

Chart 1. Gold Daily: Channel’s Top Hurdle

Daily Gold Chart
Chart courtesy of tradingview.com

When it comes to money, people start to excel in math, even if they didn’t in school. And so did I when it came to the market analysis, I started to understand both the beauty and power of geometry in the trends even though I didn’t like this subject in the school.

The price of gold made a tiny puncture on the upper side of the blue ascending channel but then retraced to close below it It’s another illustration of how powerful the trend channels can be. However, even if it gets broken, again, it will add more value as evidence of an even stronger price move.

There's almost $17 left for gold to hit the previous major top, but it vanished behind the channel’s top as does a setting sun behind the mountains. What’s next? It’s the perpetual question in the markets. Continue reading "Gold & Silver: Beware Of Correction"

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"