huge-volume reversal is unquestionably THE information that bought the highlight final week. What does it imply?
Gold’s Closing High?
It most certainly signifies that “that is it”. This was the ultimate high for the worth of gold for at the very least a while. At the least that’s what the huge-volume classes meant beforehand, particularly when gold was equally overbought because it was lately.
I marked these durations on the above GLD (NYSE:) ETF chart with crimson – when RSI primarily based on the GLD was over 80 AND we noticed an enormous spike within the ranges of quantity, it meant that the large rally in gold value was over.
We noticed quantity spikes in a number of different instances, and RSI was very overbought in different situations as effectively, however it’s the mixture of each that makes that present case – and its three analogies so particular.
RSI effectively above 70 signifies a red-hot sentiment, and the extraordinarily high-volume stage proves that it reached its excessive as a lot capital / gold exchanged arms.
In addition to, gold didn’t “solely” (as if it was a small feat, and it isn’t!) transfer on large quantity whereas being extraordinarily overbought. It additionally reversed on that vast quantity, which signifies that the latter confirmed that reversal.
And gold even reversed proper above the worth ranges that had been more likely to mark the top of the rally primarily based on how far gold rallied beforehand and primarily based on the Fibonacci extension strategies primarily based on the earlier value extremes.
USD/YEN Breakout
Gold moved above the goal space primarily based on these strategies solely briefly, and it reversed shortly thereafter, closing the week again inside the space.
I beforehand wrote that gold can be more likely to finish its rally once we see a breakout within the , and that breakout was simply confirmed.
Friday was the third consecutive day when the foreign money pair closed above its 2022 and 2023 highs, and it was additionally the weekly shut – this makes the breakout confirmed. Certainly, the pair is transferring greater additionally at present.
There was a time when the USD/YEN was additionally after a significant breakout, and it was beginning an enormous rally… And you understand what occurred to gold, then?
That was in 2021 and it was when gold was beginning one among its largest declines of the previous many years.
It may not need to repeat to the letter, nevertheless it IS more likely to have an enormous bearish influence on gold costs within the following weeks and months.
