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XAUUSD Sellers Are Ignoring the Big Picture

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XAUUSD (gold) suffered a significant loss on Tuesday.

At more than five percent, it was the largest single-day drop in the last few years.

Even the March selloff didn’t register a loss that significant, at least not at the daily close.

However, I don’t see any scenario where XAUUSD becomes a sell, at least not in the long run.

The uptrend is intact as is the cyclical bull market that I’ve been discussing for weeks.

XAUUSD long term uptrend
XAUUSD monthly time frame

The 45-year chart of gold above says it all.

The consolidation between 2011 and 2019 formed a continuation pattern within a broader bull market for gold.

But every bull market has pullbacks.

And the more aggressive the uptrend is, the more unnerving the pullbacks are likely to be.

Look no further than the August 11th candle.

Countertrend moves like that are a necessary evil to shake out any “weak hands” and reset the momentum.

I’m not saying that the pullback is over, but I am still long gold via the junior miners that I bought in April.

I told DPA members about it, and those companies are still up well over 100% even after Tuesday’s pullback.

One reason I chose to invest in gold strength rather than trade is that I didn’t have to worry about volatility over the next few years.

So far, I’m glad I took that route.

As for the short-term, keep an eye on how 1940 holds as support going forward.

If XAUUSD closes above that area today, we could see gold push back toward 1980 by the end of the week.

However, 2075 is going to be the big level on everyone’s mind now.

As long as gold is below that level on a daily closing basis, expect this consolidation to continue.

XAUUSD support and resistance levels
XAUUSD daily time frame

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18 comments
Justin Bennett says

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YM says

How did you get that 45 year chart ??

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    Justin Bennett says

    Pull up TradingView and select ICE data.

    Reply
Deepak says

Long term view in silver XAGUSD

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võ công vịnh says

tôi rất ngưỡng mộ kiến thức và tinh thần vì cộng đồng đang tham gia lĩnh vực đầu tư đặc biệt là những người lớn tuổi nhưng ít kiến thức không muốn nói là kém cỏi như tôi.mong bạn tiếp tục đồng hành với cộng đồng hầu giúp chúng tôi kiếm thêm lợi nhuận.Tôi thành thật cám ơn bạn rất nhiều

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Samed Olukoya says

Really good technical perspective. It was Donald Trump’s comments that Nancy Pelosi and other top democrats are trying to strike a deal on new stimulus package that led to the 5 percent drop on Tuesday as investors that initially ran to haven asset, gold, quickly pulled out to position for additional capital injection into the economy. If you check, the stock market, you will notice it expanded on Tuesday.

Still, I will expect a further pull back if the parliament and Trump pull off the stimulus before likely continuation of established bullish run in the beginning of the fourth quarter.

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    Justin Bennett says

    That isn’t why gold sold off on Tuesday. It was a shakeout of over-leveraged accounts.

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      Oladimeji says

      At Justin, how do you measure shakeout of over-leveraged accounts on a global scale to determine it was the sentiment that led to that huge sell-off? Does it mean bias for over-leveraged accounts was more than the sentiment of over $1 trillion expected to be injected into the economy? I trade commodities for years, what led to Gold sell-off and still weighing on it is the expected cash injection. It was the same that boosted stocks and other consumption dependent commodities, like crude oil.

      Reply
        Justin Bennett says

        I’ve been doing this for nearly two decades. I know a shakeout when I see one.

        Reply
ali says

Thanks for the update sir.

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    Justin Bennett says

    You’re welcome.

    Reply
Ngo Sy Ha says

thanks you

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Samuel says

Thanks for the information and updates. thanks.

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    Justin Bennett says

    You’re welcome.

    Reply
Oniyide Kayode says

Thanks for the analysis it is well explatory , but still waiting for the right time to take a long position

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Shahi says

Very nice article keep it up

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Colin de Ste says

In gold i trust. Yes it is going up in the long run.

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