Gold Forecast 20190829GLD

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In a change of tact, I am trading gold (in the form of GLD SPDR ETF). In recent months, with all the unpredictable political tensions going on, oil and the general stock market has become too erratic to trade. However, as unpredictability grows, the predictability of gold grows. In the same recent months, the price of gold has steadily been going up. This trend went completely under my nose until now. The reason for this trend is because when the market feels insecure traders will turn to ‘historically store of value’ assets, i.e. gold & silver. I believe the current erractic situation will continue for the foreseeable future. Even if things take a turn for the ‘better’, it would take time to normalise. In the meantime, gold’s trend should continue upwards.

I have chosen to trade GLD SPDR ETFs instead of directly trading gold futures as the open interest in the former is higher. There is also no leverage in the former, which I see as a benefit as I’d rather earn less than risk losing more in a leveraged position.

Forecasting Checklist

  • General news
    • Political Plays?
      • On-going US-China trade war
      • Trump vs The FED
      • Brexit
    • Level of uncertainty?
      • High, considering the trade tensions, Iran tensions, and Brexit tensions. ^
  • Check status of economies 
    • It is hard to tell the state of economies right now. It is pretty much a mess. There are rumours of a recession and general ‘fear’ in the market. ^
  • Check other charts for movement
    • Other charts are very erratic and hard to predict
  • Technical analysis
    • TTM_LRC ranges
      • The prices are already on the upper bands of the probability ranges. This would indicate a technical downward pressure. v

The Forecast

  • I am 77% confident that the price of GLD gold will not fall below $140 on 19/10/2019.