Gold

27 September 2018

Gold Monthly
Gold Monthly, Copyright Oanda MetaTrader

Fundamental

Any sign of instability can cause a momentary spike in gold, it is a reflexive haven seeking trade. Trade war escalation, missile tests, earthquakes are typical price movers, that activity generates concentrated moves and prices revert quickly.  Even on a normal day, liquidity spikes are typically less than 15 minutes in duration.

In the longer term, gold is selling off. As interest rates rise, the US Dollar is a better haven. Central banks generally talk more about selling reserves than building them. There are rumours about Russia and China stockpiling gold but this is not evidenced in the chart.

The “risk free rate” of 10 year treasuries is tracking the cash rate making it difficult to justify investment in a no-yield asset. Any treasury sell-off moves money into cash.

Session

Main move of the day will be between 15:00 and 16:00, often triggered by the Dow Cash market open at 15:30. Moves driven by particular events can happen at any time.

Price

Production cost is in the $1100 – $ 1250 range per ounce.

Current trading range is $1150 – $1350

Volatility

ATR typical range $9.50 – $17

2016 Price highs registered daily ATR of $28

Volume

This is the tick count on Oanda MetaTrader.

Daily average is 150 ticks / minute.

200 is a good trading rate.

Big moves get over 2000 easily for M15 chart, diluted to below 1000 in the H4.

Direction

Range (see Price). As rates increase, the dollar is a more attractive haven, it pays interest. Inflation is not a fear factor at the moment.