Gold -This Is Where The Story Begins.
Hello dear TradingView Community, hope you're all doing well and having a good rest of your weekend. Usually my greeting right now would be 'Hello dear crypto friends', but that's not how the story began.
In this special analysis today, I'm going to show you at what crucial stage Gold currently is.
For this we're going to travel back in time, when Gold was still the BTC, and also to the time, when I lost my money, huge amount of money. This is going to be a very emotional analysis for me personally. So, grab your golden coffee, make yourself comfortable, and let's get it going! ;)
Gold had already gone from around 200 Dollars during 2001 up to almost 2.000 Dollars in 2011 -a 10x move.
I personally got in contact with Gold as an Economics student back in 2011 already, through my libertarian circles at uni. Those were the same guys btw, who would later on also invest in BTC, but more to that later.
So I jumped into trading for the first time in my life, as a noob student, when Gold was correcting after the pump to $1,900. All the analysts back then where talking about some 'triangle' about to break, so I basically took almost all the money my parents gave me for my studies & my student loan, and went all into CFD trading XAU & XAG, the latter stands for silver.
My Fall Into The Abysss
From my libertarian circles, from all the news I was reading about the Greek debt crisis in Europe and the chaos that was going on globally, I was highly convinced, that the next financial crisis was just around the corner and that the US Dollar was going to collapse, which would mean that Gold would skyrocket. You might find yourself in my shoes currently, and I'm looking right at you, dear XRP friends.
Of course, as always, life comes differently. The reality was, that the central banks had opened up the money printing press, which went directly into the stock market, bringing one Wall Street party after another, while keeping the Dollar strong.
So, this correlation is crucial for you to understand: For Gold to rise, we need both the Dollar & the Market to go down at the same time. This is the optimal scenario. But Gold can still rise when the US Dollar is going down and the market is going up.
As a noob Economics student, who was waiting for the collapse of the financial system, of course I had vastly underestimated the power of the central bank to keep the party ongoing.
As you can see: Even though we broke that triangle bullish (and I was up an amazing amount back then), Gold eventually started a downtrend with lower Highs on the Weekly, eventually breaking the bottom range support at around $1,550.
Gold's stubbornness
From breaking that magical bottom -which btw is the equivalent of BTC breaking the bottom at $6,000 last November - Gold has found an important support at the $1,000 psychological range, building a Morning Star reversal on the monthly chart.
The two most important S&R zones (support & resistance) since the big correction have been the $1,200 and $1,350 mark. Even on the way down, Gold had tested the $1,350 region several times as we can see.
If we further zoom into the Weekly chart, we can clearly see the beautiful 'Golden Coffee', that is now shaping up, and which would have to broken to get confirmed, around $1,350-1,370 with the wicks.
Opening up the chart like a Russian Matroschka, as I did on Friday for my mentees during my mentorship session, we can see the beautiful Bull Flag that has just broken out of the channel. But, having recognized that, we now definitely have to see that we're overbought on the Daily RSI at this crucial resistance, which would almost certainly see some consolidation and higher Low (HL), before we can break the important S&R zone to the upside.
In this case of scenario, we would have the chance to reach the previous monthly breakout zone at $1,550, which would give the bulls a solid 15% up-move. A reaction from the bears would definitely be expected from that region, but eventually, that bull break could lead to reach the previous highs at $1,800.
From a macro perspective, zooming out and looking since 2001 again and turning our logarithmic chart on, we can see the strong bull flag, perfectly upholding the 50% retracement mark, not even touching the 61,8% 'golden pocket', no pun intended. If Fibonacci doesn't tell you much, take simple human logic: From that huge bull move from $250 to $1900, we haven't even gone under a 50% correction: this is strong. Once the crucial resistance at $1,350 breaks, we could even see huge Cup & Handle shaping up on the monthly, coming to previous All Time Highs.
So, dear friends, this is how the technicals for XAU/USD look like. Please push the like button if you had some value already to support my work.
Now let's have a look at the general market, and if this scenario is likely.
As we talked about, we would ideally see the both the Market & Dollar going down. If we look at the Dollar Index, we can currently see a nice Rising Wedge almost breaking out, which could lead to the previous S&R zone at 95 psychological.
If we look at the general market, the Federal Reserve is still fighting to get the party going currently: We held crucial previous support at $2,750 psychological, and could turn that zone into a higher Low (HL) on the Weekly now, which would give us the chance to reach previous All Time Highs at $2,950.
So, even though that's not the 'fear' case scenario that Gold would profit from, it is optimal conditions for the Gold miners & ETFs like GDX: A very nice C&H at $23 could see a 10% or even 35% up-move until the previous S&R zones.
All in all: Bitcoin or Gold?
To come back to my story, dear friends, it ends with me losing almost all the money, up until I pulled the handbrakes in after the break of $1,550: The rest of the Money I put into Bitcoin back in 2013, during the correction from $100 to 50$ Dollars. This investment has 400xed up until today: If you want, you can take any amount of money and calculate, how much I made. Had I put the vast majority of the money that I had lost with Gold CFD trading into BTC, probably I would currently be on stage with Roger Ver giving talks.
Not just because of its sheer monetary appreciation, Bitcoin fared better than Gold. Also, in the same libertarian circles, there is currently hot debates going on, if BTC will eventually take over Gold's status as safe haven. I could now put my own opinion here, but I would like to give you the best source of information, so you can judge for yourself.
Ron Paul, libertarian presidential candidate in 2008, one of the fiercest supports of Gold as money, and at the same time one of the biggest critics of the US Dollar & the Federal Reverse, made an amazing poll on Twitter:
He asked 'A wealthy person gifts you $10,000. You get to choose in which form you’ll accept the gift. But there’s a catch: You must keep the gift in the form that you choose for 10 years without touching it. In which form would you accept the gift?'
The Options were: 1. Federal Reserve Notes, 2. Gold 3. Bitcoin and 4. US 10-yr Treasury Bonds.
An overwhelming majority of his supporters -almost all of them libertarians (the biggest supporters of Gold in the past) -decided to go with Bitcoin. Almost 95.000 people participated in that poll: twitter.com/ronpaul/status/1063194370860597255?lang=en
This, my dear goldbugs, is for me the representative proof, that the market is eyeing Bitcoin as Gold, as a store of value.
I hope you enjoyed this thorough analysis, dear community, also to my background, how I personally came to crypto. If it was helpful for you, please help me get this article to the main page, by clicking the like button, so as many people on TradingView as possible can see this analysis of Gold and subsequent comparison to the other sectors. I think this is crucial knowledge for any Gold and crypto trader/HODLers out there.
Also please let me know: If you're in the crypto space, have you eyed Gold maybe prior to that like me? Or if you're a goldbug, are you also interested in crypto? I'm very curious, if there are people out there, who might have had a similar story, or just want to share their opinion of which sector is going to win as a safe haven.
I wish you a beautiful Sunday & start of the week, sunny greets from Munich! ;) Deniz
In this special analysis today, I'm going to show you at what crucial stage Gold currently is.
For this we're going to travel back in time, when Gold was still the BTC, and also to the time, when I lost my money, huge amount of money. This is going to be a very emotional analysis for me personally. So, grab your golden coffee, make yourself comfortable, and let's get it going! ;)
Gold had already gone from around 200 Dollars during 2001 up to almost 2.000 Dollars in 2011 -a 10x move.
I personally got in contact with Gold as an Economics student back in 2011 already, through my libertarian circles at uni. Those were the same guys btw, who would later on also invest in BTC, but more to that later.
So I jumped into trading for the first time in my life, as a noob student, when Gold was correcting after the pump to $1,900. All the analysts back then where talking about some 'triangle' about to break, so I basically took almost all the money my parents gave me for my studies & my student loan, and went all into CFD trading XAU & XAG, the latter stands for silver.
My Fall Into The Abysss
From my libertarian circles, from all the news I was reading about the Greek debt crisis in Europe and the chaos that was going on globally, I was highly convinced, that the next financial crisis was just around the corner and that the US Dollar was going to collapse, which would mean that Gold would skyrocket. You might find yourself in my shoes currently, and I'm looking right at you, dear XRP friends.
Of course, as always, life comes differently. The reality was, that the central banks had opened up the money printing press, which went directly into the stock market, bringing one Wall Street party after another, while keeping the Dollar strong.
So, this correlation is crucial for you to understand: For Gold to rise, we need both the Dollar & the Market to go down at the same time. This is the optimal scenario. But Gold can still rise when the US Dollar is going down and the market is going up.
As a noob Economics student, who was waiting for the collapse of the financial system, of course I had vastly underestimated the power of the central bank to keep the party ongoing.
As you can see: Even though we broke that triangle bullish (and I was up an amazing amount back then), Gold eventually started a downtrend with lower Highs on the Weekly, eventually breaking the bottom range support at around $1,550.
Gold's stubbornness
From breaking that magical bottom -which btw is the equivalent of BTC breaking the bottom at $6,000 last November - Gold has found an important support at the $1,000 psychological range, building a Morning Star reversal on the monthly chart.
The two most important S&R zones (support & resistance) since the big correction have been the $1,200 and $1,350 mark. Even on the way down, Gold had tested the $1,350 region several times as we can see.
If we further zoom into the Weekly chart, we can clearly see the beautiful 'Golden Coffee', that is now shaping up, and which would have to broken to get confirmed, around $1,350-1,370 with the wicks.
Opening up the chart like a Russian Matroschka, as I did on Friday for my mentees during my mentorship session, we can see the beautiful Bull Flag that has just broken out of the channel. But, having recognized that, we now definitely have to see that we're overbought on the Daily RSI at this crucial resistance, which would almost certainly see some consolidation and higher Low (HL), before we can break the important S&R zone to the upside.
In this case of scenario, we would have the chance to reach the previous monthly breakout zone at $1,550, which would give the bulls a solid 15% up-move. A reaction from the bears would definitely be expected from that region, but eventually, that bull break could lead to reach the previous highs at $1,800.
From a macro perspective, zooming out and looking since 2001 again and turning our logarithmic chart on, we can see the strong bull flag, perfectly upholding the 50% retracement mark, not even touching the 61,8% 'golden pocket', no pun intended. If Fibonacci doesn't tell you much, take simple human logic: From that huge bull move from $250 to $1900, we haven't even gone under a 50% correction: this is strong. Once the crucial resistance at $1,350 breaks, we could even see huge Cup & Handle shaping up on the monthly, coming to previous All Time Highs.
So, dear friends, this is how the technicals for XAU/USD look like. Please push the like button if you had some value already to support my work.
Now let's have a look at the general market, and if this scenario is likely.
As we talked about, we would ideally see the both the Market & Dollar going down. If we look at the Dollar Index, we can currently see a nice Rising Wedge almost breaking out, which could lead to the previous S&R zone at 95 psychological.
If we look at the general market, the Federal Reserve is still fighting to get the party going currently: We held crucial previous support at $2,750 psychological, and could turn that zone into a higher Low (HL) on the Weekly now, which would give us the chance to reach previous All Time Highs at $2,950.
So, even though that's not the 'fear' case scenario that Gold would profit from, it is optimal conditions for the Gold miners & ETFs like GDX: A very nice C&H at $23 could see a 10% or even 35% up-move until the previous S&R zones.
All in all: Bitcoin or Gold?
To come back to my story, dear friends, it ends with me losing almost all the money, up until I pulled the handbrakes in after the break of $1,550: The rest of the Money I put into Bitcoin back in 2013, during the correction from $100 to 50$ Dollars. This investment has 400xed up until today: If you want, you can take any amount of money and calculate, how much I made. Had I put the vast majority of the money that I had lost with Gold CFD trading into BTC, probably I would currently be on stage with Roger Ver giving talks.
Not just because of its sheer monetary appreciation, Bitcoin fared better than Gold. Also, in the same libertarian circles, there is currently hot debates going on, if BTC will eventually take over Gold's status as safe haven. I could now put my own opinion here, but I would like to give you the best source of information, so you can judge for yourself.
Ron Paul, libertarian presidential candidate in 2008, one of the fiercest supports of Gold as money, and at the same time one of the biggest critics of the US Dollar & the Federal Reverse, made an amazing poll on Twitter:
He asked 'A wealthy person gifts you $10,000. You get to choose in which form you’ll accept the gift. But there’s a catch: You must keep the gift in the form that you choose for 10 years without touching it. In which form would you accept the gift?'
The Options were: 1. Federal Reserve Notes, 2. Gold 3. Bitcoin and 4. US 10-yr Treasury Bonds.
An overwhelming majority of his supporters -almost all of them libertarians (the biggest supporters of Gold in the past) -decided to go with Bitcoin. Almost 95.000 people participated in that poll: twitter.com/ronpaul/status/1063194370860597255?lang=en
This, my dear goldbugs, is for me the representative proof, that the market is eyeing Bitcoin as Gold, as a store of value.
I hope you enjoyed this thorough analysis, dear community, also to my background, how I personally came to crypto. If it was helpful for you, please help me get this article to the main page, by clicking the like button, so as many people on TradingView as possible can see this analysis of Gold and subsequent comparison to the other sectors. I think this is crucial knowledge for any Gold and crypto trader/HODLers out there.
Also please let me know: If you're in the crypto space, have you eyed Gold maybe prior to that like me? Or if you're a goldbug, are you also interested in crypto? I'm very curious, if there are people out there, who might have had a similar story, or just want to share their opinion of which sector is going to win as a safe haven.
I wish you a beautiful Sunday & start of the week, sunny greets from Munich! ;) Deniz
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