$1,950 is getting to be firm support for Gold.
Big Picture, Gold is $1,000, $1,200, $1,600, $1,800, $2,000 and we’ve been between $1,600 and $2,000 since 2020 and, if anything, I’d say we break higher at some point.
So, let’s say I’m right and we’re in the $1,800 to $2,000 zone. That’s $200 so we have $40 sets there of $1,840 (weak bounce), $1,880 (strong bounce), $1,920 (strong retrace) and $1,960 (weak retrace).
Now we zoom back into the daily chart and see if $1,960 is holding and, if it is, then we’re making a bullish consolidation. Since we haven’t been near $1,920 – it seems like a good premise at the moment.
The reason we get these consolidation zones is because their are big buyers and big sellers and they all run trading programs that trigger at certain prices. When you see these consolidation forms – it means the programs have met at a certain line and then it’s a matter of which one exhausts itself first and then you get a “breakout” until the next opposite program(s) kick in to slow and eventually halt (at the point of equilibrium) the progress.
That’s all the 5% Rule is – we are simply able to predict where the most likely points of resistance are for the majority of algo programs that are trading the market. These days, 90% of trading is done by algos – that’s why it works so well!
That reminds me - how do we not have GOLD in our LTP?
Barrick (GOLD) is at $17.19 this morning and that's $30Bn and they only made $432M last year but expect $1.6Bn this year and $1.9Bn next year, which is 15-16x - not fantastic but that assumes Gold is $1,800, which is last year's average. This year we're been averaging over $1,900 and GOLD sells 5M ounces a year so that's $500M extra Dollars.
