XAUUSD: Gold Positioned to Break Higher in 2021

by Justin Bennett  · 

January 18, 2021

by Justin Bennett  · 

January 18, 2021

by Justin Bennett  · 

January 18, 2021

I usually write to you as a trader, but I want to take a different approach today.

As Daily Price Action members know, I’ve liked XAUUSD higher since April 2020 when it was trading near $1,600.

And my bullish gold bias hasn’t changed.

But instead of treating it as a trade, I’ve favored investing in the junior gold miner stocks, which tend to follow gold’s trajectory.

Why stocks?

For one, spot metals are off-limits in the US.

And two, buying mining stocks, especially the juniors, is similar to a leveraged bet without the margin.

For instance, I started purchasing junior gold mining stocks on April 1st, 2020.

Since then, XAUUSD is up about 16%

The junior gold miners index (GDXJ), on the other hand, is up an impressive 75% despite its recent pullback.

I also have some futures exposure, but the mining stocks offer a way to outperform gold without any leverage.

All of this is just my opinion, as always, and is not financial advice.

The key takeaway here is that I prefer XAUUSD and the gold miners as a longer-term trade/investment with a minimum 12-month time horizon.

I think that’s the best way to navigate gold right now as it allows one to capture the upside potential without the headaches from false starts.

In the short-term, the $1,780 area is key support.

Critical resistance is near $1,930, which is the top of a potential bull flag.

XAUUSD buyers need to clear that $1,930 area on a daily closing basis to confirm the breakout and re-open the door to $2,075.

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XAUUSD daily time frame

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  1. Great work!

    I see a possibility of retesting the support again making it a double bottom before the uptrend.

    Let’s watch and see.

  2. Thanks Justin for the heads up. For a 12 month horizon, check out the monthly technicals. Spot gold bias is downward with some way to go. (Macd is topping out, RSI downward bias and Stochastics some way off bottoming). I am seeing sideways action on monthly with negative bias. It has completed a 23.6% retracement from new high with next support down at 38.2 % ($1625 ish).

  3. Good morning Justin.
    Thanks for the great work.
    Please how could one buy these stocks like Junior miners, Tesla, Netflix, etc off leverage and CFDs brokers? I dont know if people from Africa or Nigeria has access to buying penny stocks.
    Thanks for your response.

  4. I want to invest in gold. But, I am a noob. Terms that are familiar for you are like enigma for me like XAUUSD. Of course, if I keep reading and watching vids, I’ll eventually learn. Everybody started somewhere. I have to keep learn, trying and failing until I figure it out.

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