Short Gold

2018년 8월 26일

Gold price just hit an air pocket in the second week of August during Asian session when it dipped viciously below 1175 till 1160.


Supply / Demand Perspective :

There were many commercial buyers in Japan, Singapore, Shanghai and Hong Kong who had their buys placed from $1170. Also, Natural Calamity (hit after a century) in the state of Kerala (Worlds largest gold consuming center) India during the mid of this week caused the demand to go up and hence, the price was moving up gradually in Asia causing / supporting Gold prices to head north across the globe against all currencies.

Fundamental Perspective :

Apart from steady rising price.. Gold, got an ultimate push on 24th August during Jackson Hole symposium when Fed Chariman Jerome Powell said the rates could be on a gradual rise but cautioned on growth and Inflation which was enough for people to sell Dollar and rush into the Gold which got a boost of more than $20.. In my opinion, this spike will fade away soon... as Dollar strength may have entered a corrective zone which wont last for long.

Technical Perspective :

$ 1171 was a crucial price target and also a 61.8 fib from November 2015 lows till July 2016 Highs. Hence, the Golden ratio was once again respected as price closed above that price the day it dipped below. So Commercial buyers were eyeing the right price :)

Conclusion :

As a result, the demand started in Asia and the catalyst for the push was from the western world during Jackson Hole. Overall, Traders and money managers are still Net Long USD. Hence, Rallies must be sold and there is a good reason for the people to renter for a short who missed it because position readjusting will again take place favoring dollar in the fourth quarter.