No bullish votes for gold this week! Ether hits a record high of 3000! (With Trading Strategy)

Gold prices ticked up on Monday, supported by a muted dollar ahead of a series of U.S. data. The spot gold rose 0.57% to $1778.09 per ounce by 15:50(GMT+8).

U.S. Treasury Secretary Janet Yellen on Sunday tamped down concerns that President Joe Biden’s plans for infrastructure, jobs and families will cause inflation, saying the spending will be phased in over a decade.

U.S. consumer spending rebounded in March amid a surge in income as households received additional COVID-19 pandemic relief money from the government.

Physical gold in India was sold at a discount last week for the first time in 2021 as a spike in coronavirus cases prompted strict restrictions and kept buyers away.

China’s gold consumption soared 93.9% in the first three months from the same quarter a year earlier, the China Gold Association said on Friday.

Frustration is creeping into the gold market as the price has been unable to break above $1,800 an ounce even in a market environment that is seeing rising inflation pressures, ultra-accommodative monetary policy, and a government that wants to spend more money.

According to the latest Kitco News Weekly Gold Survey, analysts are warning investors that if gold can't go up in this current environment, then look for lower prices. However, many analysts say that a retest of recent support could attract new buying momentum to the marketplace.

"Now is not the time to throw in the towel for gold," said Bob Haberkorn, senior commodities broker with RJO Futures. "Gold is struggling now, but at some point, it will have its day in the sun."

The gold market has seen a dramatic shift in sentiment as prices cannot push above critical resistance at $1,800 an ounce. Two weeks ago, the Kitco News gold survey saw, for the first time, no bearish votes among Wall Street analysts.

This week, for the first time in the survey's history, there were no bullish votes for gold.

This week, 15 analysts participated in Kitco News' gold survey. Of those, eight analysts, or 53%, said they were bearish on gold; at the same time, seven analysts, or 47%, said they were neutral on prices next week.

Photo: KITCO

Some analysts have noted that while gold has been unable to break above $1,800 an ounce. It has also managed to find strong initial support above $1,750 an ounce. June gold futures last traded at $1,765.90 an ounce, down 0.61% from last week.

While sentiment has soured in the gold market, looking beyond the headlines, many analysts said that they would look to buy gold at a lower price.

"Gold needs to test the $1,745 level, a ceiling for the past two months from which it broke out earlier in the month. The sooner gold tests this new floor, the better. The longer-term is very positive for gold, with increasing inflation now quite evident, but a Federal Reserve refusing to do anything about it," said Adrian Day, president of Adrian Day Asset Management.

The question many analysts are asking now is how low gold prices could go in the near term. Marc Chandler, managing director at Bannockburn Global Forex, said that if $1,750 an ounce doesn't hold, the next level he is watching is $1,724.

"The momentum indicators like the MACD and Slow Stochastic appear poised to turn lower. It already approached the $1752 area that holds the 38.2% retracement of the April rally," he said.

Although he sees long-term potential for gold, Haberkorn said that the precious metal would struggle as it faces tough competition from copper, lumber, equities, and even bitcoin as these markets are seeing significant upside momentum.

"There is strong risk-on sentiment in the marketplace right now, and nobody wants to hold and sit on boring gold," he said. "Investors see other exciting places in the commodity markets to invest their money."

Bitcoin’s domination of total cryptocurrency market value is declining as its next-biggest rival Ether reaches the $3,000 milestone, suggesting room for more than one winner among digital tokens as the sector evolves.

The ethereum prices rose 12.1% to $3122.2 by 15:50(GMT+8).

Ether is up more than 300% for the year so far, easily outpacing a 95% rise in the more popular bitcoin.

Photo: Bloomberg

In part, the big rally is a catch-up to late 2020 gains in bitcoin, said James Quinn, managing director at Q9 Capital, a Hong Kong cryptocurrency private wealth manager.

It also reflects improvements to the ethereum blockchain, he said, and a growing shift towards “DeFi”, or decentralised finance, which refers to transactions outside traditional banking for which the ethereum blockchain is a crucial platform.

“At first, the rally was really led by bitcoin because as a lot of the institutional investors came into the space, that would be their natural first port of call,” Quinn said.

“But as the rally has matured over the last six months, you have DeFi and a lot of DeFi is built on ethereum.”

The launch of ether exchange-traded funds in Canada and surging demand for ether wallets to transact non-fungible tokens such as digital art have also pushed up the price.

The ether/bitcoin cross rate has soared more than 100% this year and hit a 2.5-year high on Sunday, pointing to a degree of rotation into the second-biggest cryptocurrency as investors diversify their exposure.

“Surging DeFi volumes continue to push ethereum prices higher as investors gain confidence in crypto and see ethereum as a safe second-place asset,” said Jehan Chu, managing partner at Hong Kong blockchain venture capital firm Kenetic Capital.

Illustrating the momentum for such new transactions, Bloomberg reported last week that the European Investment Bank plans on issuing a digital bond over the Ethereum blockchain, while JP Morgan plans a managed bitcoin fund.

Trading Strategy (source: Trading Central)

Pivot: 1770.00

Our preference: long positions above 1770.00 with targets at 1783.00 & 1790.00 in extension.

Alternative scenario: below 1770.00 look for further downside with 1763.00 & 1755.00 as targets.

Comment: the RSI advocates for further upside.

Supports and resistances:

1796.00

1790.00

1783.00

1778.30 Last

1770.00

1763.00

1755.00

Guideline for Trading Central strategy 

Trend chart reading guideline

1. First look at the time period in the upper left corner of the chart: ·30MIN and 1H chart shows the trading suggestions for intraday ·Daily chart shows the market trend analysis in next 2-3 days

2. The blue horizontal line on the chart marks the pivot: pivot indicates the reversal of the market. When the price is above the pivot, it indicates an upward trend, when the price is below the pivot , it indicates a downward trend. When the price breaks through the pivot, the trend is reversed.

3. The red and blue thin curves in the Candlestick chart chart are technical indicators: Red line is MA20+Bollinger bands, Blue line is MA50. under the Candlestick chart chart are also the technical indicators: Blue line is RSI, Red line is 9MA;

4. The green horizontal line is the resistance level for a price increase, and is also the profit target for long orders; the red horizontal line is the support level for a price decrease, and is also the profit target for short orders.

How to use TC strategy？

1.[Pivot] is the reversal line of the market trend. When the price up the pivot line which means in Bullish, you can open a long position or Buy. on the contrary, when the price under pivot line which means in bearish. You ‘d better make short positions or Sell. 

2. [our preference] is the main trading suggestion for your reference. You can exit your trading refer to this target or close positions before it.

3. [Alternative scenario] is the plan B for your reference. 

4. [Comment] is the technical analysis of market trends and technical support for trading strategies. 

5. [Supports and resistance] Supports are levels where the price tend to find support as it falls.

Resistances are levels where the price tend to find resistance as it rises. So, exit before the trend reverse.