Watch for a top in gold!
Crikey. The Pentagon has confirmed that Iran has fired a series of rockets at two US-Iraqi airbases.
This is what seems to be an Iranian response to the killing of General Qassem Soleimani.
That happened last week, on a Friday, if you missed it.
US stock futures fell on the news. Gold shot up 1.5%.
Even the oil futures jolted higher.
Key points and war drums
You may remember on 6 January I mentioned that we should be on alert for a potential top around 10-13 January. That’s from Friday to Monday, this week.
The latest move higher has increased the chance of that happening.
That doesn’t mean sell. It’s just that moves of this intensity don’t last forever.
And when you can incorporate Time, Price and Pattern into your analysis, you begin to make some good trades.
If you’re investing in gold, like I am, sit tight. Gold in your portfolio is always an ideal thing to sleep at night.
When Iran attacks US bases
Anyway, back to the attacks. And then we’ll touch more on gold. I’ve got a chart to show you.
One thing that I’ve learned about the stock market is that the market climbs the wall of worry.
But not only that, it’s super quick to discard the information.
Does anyone remember the issues late last year with the oil field?
I barely recall it now. Investors have certainly moved on.
We’ve got new problems now. World War III drums have also started to roll out.
Stress not. I don’t see any major altercations.
That’s even with the Islamic Revolutionary Guard Corps suggesting there will be more attacks.
It called the attack the start of its ‘Martyr Soleimani’ operation. Sounds pretty freaky.
But investors, like you and I, will move with what they know now. Not with what has happened in the past.
Here’s a chart you should see
Here’s the chart I was telling you about.
It’s the price of gold based on the futures market.
There’s the spot price and the futures price. They differ slightly. It’s up to you which market you want to follow. It doesn’t really matter.
The blue and green lines on the chart are generated using the ‘static square of 9’ tool.
It can be considered an advanced tool. But in short, the tool calculates price levels according to degree levels.
Again, this is an advanced tool. Don’t get bogged down in the jargon.
Just know this. The tool has had a good history of pinpointing highs and lows in the price of gold.
This is also called support and resistance levels.
And right now gold is flirting with two key levels. That’s the green and blue line around $1,581 and $1,621.
Currently, gold is hovering around US$1,589. Don’t look for perfection, as long as the price floats in a 1% range I’m happy.
Anyway, let’s get back to the finer detail.
If the price of gold hits $1,621 between 10-13 January, I wouldn’t be surprised if the price of gold declines.
Of course, nothing is guaranteed. This is the financial markets after all. But I hope this gives you more clarity around what I was watching for.
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Until next time,