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Worried About Gold

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Recently, I've been very bullish on gold in light of the recessionary/deflationary Coronavirus crisis.  The premise of my recent long trade lies in the fact that global monetary stimulus should lead to higher gold prices.  But despite the massive packages recently announced (and hints of more in the coming), gold has moved sideways in recent weeks, calling into question the bullish case.

Referring to the chart below, the pattern might seem like a in-progress cup having an inverse head-and-shoulders continuation formation at its base.  But things aren't always as them seem.  When I delved into the details of the wave structure last night, I was struck by my findings; The January 2016 - March 2020 rise recently hit a brick wall upon reaching the 78.6% retracement of the October 2012 - December 2015 decline.  For gold to prove me wrong, the $GLD must at least take out the recent highs.  But February's candle wasn't all that promising, and neither is March's candle, at least so far. 

GLD monthly chart: https://www.61point8.com/Portals/0/article%20images/2020/20200313/20200313GLD1.png


Trade vigilantly,

Peter Ghostine (@peterghostine)


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