Welcome to a capital-hungry breakdown of XAU-UST. So we are starting a new year, of course, 2021, with, of course, a new fiscal year opening up business-wise and new monthly candle, quarterly candle, and yearly candle. So it's always good to do some higher time frame analysis down to the intraday time frames to understand the overall trend, market flow, and potentials.
for historical repetition, if we have any. So we're going to be starting out here on gold on the 12 month chart, and just looking at how the new year is opening up how the previous year closed any potentials for historical repetition, alongside with how the current market fundamentals, volatility, and structure is and strength between buyers and sellers, of course, a lot of us have been on holidays the last couple of weeks as markets have been slower and through the Christmas and New Year's period. So it is always good to take things slow, take a breath, relax, step back and just analyze the markets for what it is. It may be a new year, but it's the same capital hungry. We still follow the same fundamental principles as per our trading goals.
We still analyze information and digest information the same way. And we still are going to be doing the same routine to develop our trading skills and overall market analysis skills. OK, so gold, of course, when we're looking at the new year here, you can see that. Sorry to me to put that there. You can see that the last year closed very strong with buyers in control because of all the overall market fear we had.
around coronavirus, how 2020 started with the potential of the Iran war, how US interest rates are low, and there's a lot of economic uncertainty coming into global recessionary periods. Overall, gold was extremely bullish. But after an extended bull run, we can see that previously, historically, such as after the 2008 financial collapse, when gold had this extended move and created new all time highs. We had the following year start to show some exhaustion, fill some of the range to the upside to grab liquidity.
And then as economy started to rebound, we had price enter this corrective stage. So what we can see now is that yes, coronavirus is still active, but we do have more and more vaccine talks. We do have that gold has already peaked all time highs after a very strong extended buy rally.
over a three-year period from the 1100 lows. And we do have that this new yearly candle, just from a technical standpoint, has yet to create a lower wick and is already pushing up to grab some liquidity to the upside, where if we can notice any type of technical resistance created, plus market optimism going into 2020, such as more talks around vaccine, decrease in case spikes around COVID. and overall economy start to rebound, then there's a lot of potential for this candle to flip bearish, create that lower wick and start to play in this higher timeframe range when we start to zoom down the timeframes and look at that. But when we're technically speaking, it doesn't have to create a lower wick, but when we're looking at the probability of the higher timeframe candles, you can see out of all the candles, there's only been one year where a lower wick was not created and we had this flat bottom.
So with the potential that we are at new all-time highs, the potential for this historical repetition, as well as if we have any market optimism, there is a stronger probability that we can see that lower wick being created if we fail to break above these previous highs. Now, this is of course looking at the yearly chart and we're going to be zooming down the timeframes. We look at the intradays, gold is going to be more bullish.
So just because we're doing this higher timeframe analysis doesn't mean we start jumping in cells. We are just analyzing the markets, looking at the possibilities of historical repetition, aligning the market timing of the new year and alongside current active fundamental catalysts such as coronavirus and the vaccines, which is still primary in focus. And we are using that to project.
and forecast the potential path of price as we start also zooming down the time frames to look for trade ideas. Okay, we're just staying fresh and keeping sharp. So what I am trying to describe is that If we even continue to push up, but don't fully fill the range and notice technical exhaustion on the intraday timeframes, as well as we have stronger signs of fundamental market optimism, which we would see from like equity still being bullish to continue on deeper into the year. We would see that if coronavirus starts to fade out from the world and from the markets, and we have more vaccine talks and vaccine rollout, no more lockdowns, economies. opening back up, and we have that economic recovery stage, then with those technical confirms and fundamental confirms, there's a lot of potential to start having gold buyers exhaust exit positions and sellers jump in to have gold enter a higher timeframe corrective stage after that strong impulsive rally.
Okay. And just what we want to identify is with this new yearly candle, it's actually a good sign that it's already started to push up without creating that lower wick to start. It's already starting to grab some liquidity to the upside. Now, if you watch the previous gold higher timeframe webinars, you would understand that at these all time highs and at these lows created, there's a lot of potential after this extended rally and with the repetition of history, this being the post 2008 crash rally. Years later, markets recover, you enter a recovery stage, create a base, gold overall still bullish.
Then we extend from this base to the upside to new all-time highs as we had all those fundamental reasons, right? Potentials for Iran drama, trade war drama, low global interest rates, coronavirus, all in combination. Had gold very bullish and the safe haven appeal strong for an extended period of years.
But now. Like I'm saying, we are at a very, very critical point, fundamentally, technically, and as per market timing and economic cycles. We are at this area here.
So we've had this extended move to the upside. Now we're having price potentially first pushing to the upside and grabbing liquidity. This three-month candle has yet, very similar to, of course, the yearly and the one-month, has yet to create a lower wick.
where there is a lot of potential for these higher timeframe candles to create that lower wick, or at least a wick on each side. Technically, when you backtest that probability across different pairs and look at the higher timeframe candles, such as weekly, monthly, quarterly, yearly, right? So when we start to zoom in the timeframes, if we can identify any points where buyers may face a struggle to break above, and we start to notice exhaustion, this would be a high risk sell area to start to play this historical repetition, where as markets may be indecisive, as we have a lot of back and forth with COVID, we have a lot of back and forth with vaccines and global political issues.
We could have gold play in this range and have this historical repetition for an extended period of months through the 2021 year and into 2022. So if we see that, we just want to... we just want to understand that if we don't get any breaks above previous all-time highs and if we don't get any breaks below these candle body lows similar to here that we aren't looking for any positional trades or any extended new highs or breaks of this structure and gold can play in this area for an extended period of months so on the intraday we want to just play the intraday trends intraday structure until we get um until we get a strong fundamental catalyst of economic recovery, which would be like, of course, mass vaccines, central banks raising interest rates again because economies are rebounding, coronavirus fading from the markets, then we could have stronger potential for this sell-off and corrective move. Or if we have that, because we don't know what's going to happen in the future. If all of a sudden COVID-19 gets mutated to like an airborne COVID like this movie I saw, But as per the market impact, it brings mass market fear and it really makes investors globally panic and move their money into safe havens. Then and gold technically breaks above the 2075 highs.
You know, we're going to have a continued rally to create new highs. Right. But when we're looking at the economic cycles and current price positioning, I'm just seeing that similar to the post 2008 crash after it was priced in.
And we had new highs created that we could have potential for this historical repetition, right? Meaning that as an intraday trader, I'm looking to play this very higher time frame range for about 1750 all the way up to 2075 all time highs, unless I get validation of mass. economic recovery or continued market fear and new market fear. We would need new catalysts that have not been priced in that is stronger than the initial COVID impact to really break into new highs in gold.
We would need central banks to cut rates even further, trigger more market fear and safe haven currencies to gain a lot more strength and risk currencies to weaken. Right. Until then, if we have.
If we have equity markets still lingering around their highs, we still have a lot of indecision with COVID over the next three to five months, three to six months into 2020. We still have a lot of indecision regarding the vaccines and the rollout. Don't be surprised if gold repeats history and just starts to generate liquidity and range in the higher timeframes here. OK.
Because right now we are at that decision point. Now, where have we seen this before, where you have a massive upside move, a correction, a strong bounce that doesn't break previous highs technically, right? And then a continued move to revisit these lows and price plays in this range, right? So now what are you seeing?
Price have this extended high, a strong sell-off to these previous candle body lows. the strong area of interest being created where if gold doesn't break above let's just say around let's just say around 1960s 1970s here don't be surprised if buyers exit out positions sellers jump back in and we start revisiting these lows okay so now as we talked about the market timing of it being a new year and some of the macro technicals of like the yearly candle not having a lower wick, how it's grabbing liquidity to the upside first. And we talked about the potential for fundamental historical repetition and economic cycles.
You can see we're zooming in the timeframes on the monthly now. We have potential for this technical repetition as well. And these candle body highs around that 1980s region and these candle body lows around 1800s.
is our very higher timeframe macro range. We are going to be continuing to identify and watch for the next three to six months price potentially play below, play in between, sorry, unless we have reasons for mass fear and upside volatility or mass optimism to get this corrective phase. Okay. So now when we're zooming in, on gold obviously we already have all of our key levels lined up but we're going to be looking at that more when we go into like the four hour i still want to keep it very bare bones here we can see this candle body conjunction in cluster point and these candle body lows like i was just telling you guys and the fact that this yearly monthly and quarterly candle just to start january right now only four days into january only the first business week of the month has yet to create a lower wick If there is a not enough buyer order flow to break above this 1970s region, do not be surprised if we revisit these lows and this candle turns bearish. With that being said, with the current price point of gold and as we zoom in the timeframes from a macro higher timeframe perspective, if we have intraday candle closures above these candle body conjunction points, I can easily see us to go revisit these all time highs and potentially break higher with the fundamental catalyst behind it.
Right. Otherwise, this area is from a macro standpoint is high risk and high reward cells because you have the potential to revisit all the way back down to the 1750s here. OK, one thing we want to identify in the short term of. why gold is also pushing up just to start the year is that the dollar is starting out relatively weak when you look at the dollar index and um and we still have a lot of uncertainty regarding covid and of course that um and of course consumer confidence and morale dropping after the holiday season with the winter blues and new year depression being amplified by of course this covid COVID impact, lockdowns and everything else, right? It's been a lot harder of a year on consumers and citizens compared to other years.
And this is already a time seasonally, where you have a lot of strong consumer morale and confidence before the holidays. And there's usually strong economic data like retail sales, and consumer inflation during that period. And then you start to enter the blues and depression afterwards, when people get to the reality of all their bills, back to work. After spending all that money, you start and this leads to an economic impact of those data reports such as CPI and retail sales dropping, right? It just makes sense.
It's just a seasonal impact change. It's been a lot worse this year with COVID, of course, right? So our overall macro bias on gold, looking at the yearly, quarterly, and monthly charts so far, is that, and our thesis, you can say, our theory, is that there's strong potential for historical repetition in gold to play in this range from like 1750s to about 1980s, and play in that range for an extended period of months, as well as the new monthly candle, quarterly and yearly candle has yet to create a lower wick.
And there's a lot of potential it can create that wick. And of course, we're not looking for any safe buys long term unless we really break above 1980 with the fundamental catalyst and any safe sells long term unless we break below 1750s, 1770s with optimism catalysts. Otherwise, as intraday traders, we are going to be playing this higher timeframe range.
and understanding that if we don't break above these significant highs, there's a lot of potential for a downside move. But now as we zoom in, we have to align that thesis and theory with current price action, market structure, and buyers and seller strength. You can't just start jumping in cells willy nilly or making decisions based on these higher timeframes. If you trade on the lower timeframes, if you day trade, if you positionally trade and you're looking to hold for three months, yeah, you can enter now, but you're just left out.
you'd also have to have the risk and reward set to that type of trading, right? But most of us don't. So now let's continue to zoom down the timeframes and go to the daily where we can see the daily is coming into a very strong area of price sensitivity.
So overall, what I want to identify is we do have some intraday bullish market structure and higher timeframe bullish market structure. being respected from this low point onwards and this dip point here. And we are starting to break above, not yet.
We are starting to almost break above previous highs and break above this higher timeframe bearish corrective structure. But what we want to note is there's a lot of price sensitivity on the higher timeframe here. And we are currently coming towards retesting previous highs. And the new yearly, monthly, and quarterly candle doesn't have...
any lower wick just yet. So we will have to be very cautious coming up to this price point in a lot of this price sensitivity here. But we can't deny that we have broken out of this bearish market structure, where even if gold rejects here and does a pullback and fails to break below these lows, this is creating some type of lower wick on the monthly, quarterly and yearly.
And we could still continue to respect the break of bear structure and then the upside move. But all I'm talking about is for us looking for trades, just as we've already had the market gap up, we've already had this extended rally. And just as we don't have a clean break of these previous highs and because the quarterly candle and yearly candle has yet to create a lower wick, I don't want to start buying at this intraday top.
I would really need to note on the lower time frames a clean break above these highs and a validation of bullish structure to start taking extended buys up. All right so let's clean this up a bit. So we already have our key levels mapped out that we use. Okay, so let's highlight some structural points. We're going to go from this low point straight across here.
So even though gold, even though higher timeframes, like I'm telling you guys, and we're going to, and we're just going to better identify that bear structure from, of course, this peak point down to this sell-off point here. Okay. So even though on the higher timeframes, the monthly, yearly.
and quarterly candle has no lower wick, and we're coming to a very strong price sensitivity area. And even though there's a strong potential for historical repetition and goal to sell off all the way back down, is there validation for that at current price point, current market structure, and the current buyers and sellers and buyers versus seller strength? No, right? So yes, we have those macro higher timeframe theories. But is it execution time for that just yet, especially safely to start looking for gold cells?
No. Not just yet, not even on the lower timeframe, not on the intraday timeframe, because you have to keep in mind that yearly candle could make its lower wick months from now. That quarterly candle could make its lower wick 60 days from now. That monthly candle can make its lower wick 20 days from now, right at the end of the month.
So that's what I was trying to tell you guys. That is something we should note technically in the back of our head and have these macro biases and understand what's happening and be sharp. and understand the possibility for historical repetition, understand the higher timeframes, but we can't execute on that willy-nilly because we have to have the validation as we start to zoom in the timeframes.
So now when we're looking at gold, what I'm potentially seeing is if we reject in the current price point area we are at, or even if we squeeze up to previous highs around 1953. and fail to break, this would be high risk, high reward sells to look for better risk versus reward buys at a retest of previous highs, at a retest of the broken bear structure, and at a retest of this bullish structure. Okay. I would only be looking for safer buys above 1965. previous highs.
And I would only be looking for safer long-term sells if we really broke back below 1876, because look at all this support and liquidity generated by buyers here in this intraday order block that is extended into a new intraday high, broken previous highs, broken bear structure and respected bullish structure. All right. So let's label that out.
Yeah, so yeah, everything we described, we went down from the yearly chart, the three month chart, the one month chart, we understand the macro sentiment and bias that we have potential for that historical repetition. We understand that technical note of the 12 month, three month and new monthly candles having no lower wick, the repetition for gold potentially playing in that higher timeframe macro range. But as we zoom into the intradays, and as we look at market sentiment, we can't deny.
how currently the US dollar is still bearish on the intradays. There's still that little bit of fear keeping the precious metal safe haven bullish as global interest rates, specifically US interest rates are still low. We do have Federal Reserve speakers later in the week and the monetary policy statement, which that if they reflect on any economic recovery could give a short-term boost to the dollar and a sell-off to gold if we have that confirmed.
But currently we have buyers in control. A break from this liquidity zone where it was validated as buyer side liquidity as we broke above previous highs, respected bullish structure, failed to break previous lows. And we had a break of bearish structure here.
As we had new intraday highs created, I wouldn't be looking for, I would not be looking for any buys at this price point. I could see us having a potential sell off if we peak a bit higher around 1953 and getting some exhaustion for a pullback. or sells below 1929 for that pullback. Better risk versus reward buys would be at a retest of 1902 previous highs, retesting the bullish structure, bear structure failing to break and then an extended buy side move or safer buys would be breaking above 1965 with continued bullish momentum. I would only be looking for safer sells higher timeframe below 1855 key level and a break below the bullish structure, breaking below this price sensitivity area to the left.
getting some US dollar strength short term and having gold buyers exit out and sellers jump in accordingly.