💛 August 2020 Gold Dip Buying Guide
Are you wondering what levels to buy on this gold price correction?
In this chart I explain all the potential areas buyers will step in and where we may see the end of this leg down.
There are 4 potential support areas, I have come up with each support area by using:
What I found most interesting using FIB and 2008/2018 bull market support and resistance areas, was that they both landed near enough at the same price. By having two different units of measurement align closely gives me greater confidence that these are good areas to expect buyers to step in.
I have adjusted my buying areas to round numbers as I believe that to be more accurate when taking in pricing psychology.
There are 4 areas of support listed on my chart, they are:
Price does not bounce at one specific price point, rather an area of price.
How many of these buying zones will gold trigger? That will depend on how the market prices the news in the next few weeks.
Cases can be made that gold may dip its toes at the $1,800 levels before carrying on upwards. I can believe that.
Cases can be made for gold reaching the $1,690 area if there is liquidity crash like we saw in March, better than expected economic data or a rise in treasury yields. I can believe that.
If gold breaks below $1,550 we will then need to start asking if the bull market is over.
Gold got a little ahead of itself in this rally, when you see the title “GOLD MAKES NEW ALL TIME HIGH” on the front of every business paper, it’s a good signal that the short-term top is in.
If you have ever heard the term "SHAKE OUT", this is the second shake out in this gold bull market.
The safest way to ensure you catch the dip is to buy increments at each level.
Do you have a question about these buying levels? Please leave a comment below and I’ll be happy to answer :)
In this chart I explain all the potential areas buyers will step in and where we may see the end of this leg down.
There are 4 potential support areas, I have come up with each support area by using:
- Fibonacci retracement tool - I have tagged the march 16th low wick and the August 7th high wick.
- Previous support/resistance areas – areas that have acted as support and resistance multiple times in the past are most likely to act as support and resistance in the future.
What I found most interesting using FIB and 2008/2018 bull market support and resistance areas, was that they both landed near enough at the same price. By having two different units of measurement align closely gives me greater confidence that these are good areas to expect buyers to step in.
I have adjusted my buying areas to round numbers as I believe that to be more accurate when taking in pricing psychology.
There are 4 areas of support listed on my chart, they are:
- $1,830- $1,800 – The monthly closing high for gold in 2008 was $1,824 and the 0.382 line on the FIB reads $1,836.
- $1,760- $1,750 – This price range has acted as support and resistance in the 2008 run and 2018 bull market. The 0.5 FIB sits at $1,760.
- $1,690-$1670 – This area has acted as support in the current bull market, we can see from the chart the price bouncing around that leave. The 0.618 FIB reads $1,687.
- $1,585- $1,550 – This area has acted as support and resistance in the 2008 and 2018 bull market. The 0.786 FIB reads $1,583.
Price does not bounce at one specific price point, rather an area of price.
How many of these buying zones will gold trigger? That will depend on how the market prices the news in the next few weeks.
Cases can be made that gold may dip its toes at the $1,800 levels before carrying on upwards. I can believe that.
Cases can be made for gold reaching the $1,690 area if there is liquidity crash like we saw in March, better than expected economic data or a rise in treasury yields. I can believe that.
If gold breaks below $1,550 we will then need to start asking if the bull market is over.
Gold got a little ahead of itself in this rally, when you see the title “GOLD MAKES NEW ALL TIME HIGH” on the front of every business paper, it’s a good signal that the short-term top is in.
If you have ever heard the term "SHAKE OUT", this is the second shake out in this gold bull market.
The safest way to ensure you catch the dip is to buy increments at each level.
Do you have a question about these buying levels? Please leave a comment below and I’ll be happy to answer :)
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