Momentum Reversal? Gold’s Heads Down for the First Time in 4 Days

The Daily View for Gold

  • At the time of this writing, XAUUSD’s price is down $-1.28 (-0.07%) from the day prior.
  • Gold has seen its price go up 4 out of the past 5 days, thus creating some compelling opportunities for bulls.
  • If you’re a trend trader, consider that the strongest clear trend on the daily chart exists on the 100 day timeframe.
  • Price action traders may also wish to note that we see a pin bar candlestick pattern on Gold. Given that we see downtrend on the 20 daily candle timeframe, and that such candlestick patterns often denote reversals, this may be worth noting.
  • The moving averages on the daily timeframe suggest a bearishness in price, as the 20, 50, 100 and 200 are all in a bearish alignment — meaning the shorter duration moving averages are below the longer duration averages, implying a stable downward trend.
  • Divergence between XAUUSD’s price and its RSI may be manifesting. As such, be on the lookout for trend reversal in XAUUSD’s price.

Below is a daily price chart of Gold.

XAUUSD

Featured Gold Idea From TradingView

Below is a trading comment entitled Bitcoin Performance Across Assets (Gold, SPX, and TSLA) you may find interesting:

This is a simple study, much like the one I published in early July, where I suggested buying Bitcoin as it approached a long term trend against SPX could be a good decision. Here’s the post: https://www.tradingview.com/chart/BTCUSD/1lrZESlQ-The-Bitcoin-SPX-Ratio-Presents-A-Possible-Buy-Signal/In this analysis, I offer two additional comparisons. On the left is Bitcoin’s performance versus Gold. Interestingly, Bitcoin has pulled away from the trendline and successfully retested the previous high as support. The 314 level is a loosely calculated representation of where Bitcoin would reach Gold’s market cap, at current Gold valuation. In yellow, I’d drawn what I think could happen if the bull market for crypto continues. Ultimately, I think BTC/Gold will test that trendline again, but it may happen at a much higher price. Some people would say doing TA on these ratios is pointless, but I find it interesting. Bitcoin has also tested its previous ATH against SPX and bounced from near the trendline (middle chart). On the far right, we have Bitcoin’s performance versus Tesla. This one is particularly intriguing. TSLA is one of the few assets that has actually outperformed Bitcoin for much of the last three years. Since 2018, the ratio has not made a new all-time high. Based on the chart, the trend is sideways, and it’s hard to know whether or not Bitcoin will outperform TSLA stock. The fact that the two have performed similarly over the last few years is not really a surprise — both are tied to significant innovation. Just for fun, here’s the ETH/TSLA ratio, showing consistent lower highs since 2018: https://www.tradingview.com/x/QpCcXqtK/And here’s the BTCUSD and TSLA charts side by side, showing that they aren’t necessarily correlated, but that they have both had explosive gains over the last decade. The chart also shows that the largest periods of parabolic grow…

VictorCobra