GOLD: an educational walk-through of the past and current cycle

[Zack Zarr 5]

On this post, I will elaborate on my thoughts on the price movement on Gold over the past bearish and current bullish trend. This is a layer-by-layer (or onion-type) approach from the simple price action to much deeper and more educated analysis based on the COT data. As always, your feedback is highly appreciated.

The Gold chart and possible zones

On this simple Gold chart, I highlighted some of the areas which the price has shown strong reaction, either bearish (red boxes), bullish (green boxes) or consolidation type (curly brackets).

As you know, I am a big fan of understanding the Big Players thought process and decisions. So this is a game of me guessing what these players have done in the past. And yes, you can only guess based on this simple chart, nothing more!

It is not too difficult to imagine some Short Adding and Long Closing activity inside the red boxes and Long Adding and Short Closing activity inside the green boxes. I'd suggest you play along this game and make your guesses before looking at the next chart.

The next chart shows some of these activities.

The notes beside each box are the actual events that occurred based on the COT-legacy reports. If you want to learn more about these reports, I have published some posts on this forum (A Deep Dive into Commitment of Traders Data Analysis, Commitment of Traders Data Analysis- Data Meets the Chart, Commitment of Traders Data Analysis- Part 2)*

*Note: for some of these posts, you need our FREE membership accessible by singing up at the bottom of this page: https://bearbulltraders.com/forex-trading/

Some of these action by the Big Players are intuitive but some are not. In the following sections, the actual numbers based on these COT reports are shown on the chart. You will see how the action of these players affect the price.

Continue reading in our FREE membership section GOLD: an educational walk-through of the past and current cycle.

Zack

[Zack Zarr 5]

UPDATE:

Gold traders showed some large activities on their long and shorts over the last weeks of January based on most recent COT data. 

The chart shows it in a more clear way how the Large Speculators tried to take some profit from their longs while adding significant shorts

Over the first few weeks of 2019, these traders took profit on 23K of their longs while adding 26K shorts. But as you can see, their shorts ended up in loss when the price jumped even higher on the week of Jan 29th when they again added 26K more longs.

Interestingly enough, they didn't close those 26K shorts as of Jan 29th. It would be interesting to see if the recent jump was caused by closing all those shorts or they actually added more longs again!

For the time being, I still have my longs open since last Oct as I mentioned in this post (https://forums.bearbulltraders.com/topic/752-fx-weekly-technical-analysis-and-trade-setups-based-on-october-09-2018-cot-reports/).

I know that a downturn/ or some partial bearishness is coming. But I need to see some signs of serious bearishness on COT data (which is still delayed by three weeks due to government shutdown) before changing my mind on the Gold bullish action. 

 

Zack

[Zack Zarr 5]

UPDATE (Feb 26, 2019 | 10:30 PM EST)

The COT data form Feb 5th and 12th were released since last update, but not much change has happened in longs and shorts. 

There has been a back and forth action in longs and shorts form non-commercials (large speculators) without any clear intention. Interesting is to see that those 26K shorts added near 1290 level were still open until Feb 12th (the latest COT release). I am still wondering if the last jump in price was caused by forced closure of those shorts, or it was only adding more longs. We'll find out by the end of next week. 

 

Zack