It is said that gold is an enemy because the relationship between them began amicably when the dollar was established on the principle of deposit, that is, we deposit an ounce of gold for every $35 that is printed. This issue was worked on from 1913 until 1974, when the enmity between gold and the dollar began since the Nixon shock, which It raised from $35 per ounce to $750.
An excerpt from an old article showing the story of gold and its enmity with the dollar
The Federalist was established in 1913, and it was established in cooperation with a group of giants of Wolf Street traders, the most famous of whom was J. B Morgan, where these merchants used to own banks, and these banks were exposed to bankruptcy when a large percentage of the people asked for their money from the bank, and the bank did not find sufficient liquidity to return the money, as it had spent the money (towards lending), so a search was made among the merchants to establish someone who would provide them with liquidity because fragility In banks, it has reached the point that a simple rumor is enough to make a bank on the brink of bankruptcy, and indeed it was agreed in cooperation with the state in Jekyll Island, Georgia, that there is a bank (the Federal), that prints money on one simple condition, which is the presence of gold in exchange for this money.
Things were good and the concluded agreements were respected by everyone until the Vietnam War came, where Richard Nixon printed money without putting gold in front of this dollar, to declare in 1774 that he had three years to print a dollar without the value of this dollar and this raised the price of gold from $35 to $750.
What happened previously led to the formation of great enmity with the dollar on the part of several parties, whether from countries that tried to get rid of the dollar because it had broken a promise to preserve its value, or from merchants who believed in the end that it was just a printed paper that did not give real value.
Latest technical developments
Gold is currently trading at its all-time high of 2000, with an excessive rally of momentum that is significant evidence of further upside, and with no evidence of saturation.
Latest developments on the basic level
This week, gold awaits the two most important news for its listeners. It may change its medium and near path, but the long path is still my view of it as it is, except that gold must absorb high inflation rates strongly, and whatever the Fed does to avoid high inflation rates, but gold must absorb inflation.
The news that gold awaits
1. The news of the interest rate issued by the Federal Reserve, which is expected to rise by half a point, which will lead to a reduction in the price of gold by at most $50 (the relationship between gold and interest is inverse)
2. The consequences of unemployment, which will be issued on Thursday.
The relationship here is inverse with respect to gold, and direct with respect to unemployment. On this basis, we say that gold, in terms of fundamental analysis, will go down slightly to raise or stabilize interest (unless it is raised more than expected, then we see a strong decline) and then be affected by the news of the repercussions of unemployment, which will have a positive effect. .
according to the latest developments
In one of the expected scenarios, the year 2000 is not far from reach, and it is achieved in the event that gold manages to hold on over time above 1905. On this basis, we complete the scenario to have:
technically in the medium term
At the present time, due to the excessively high momentum rates, the condition for rising towards 2100 as the first new and deterrent area for gold is the test of 1930, then closing above 2000 twice in a row, otherwise it means the return of prices towards 1900, and according to the conditions we say
First scenario
In the event that gold closed above 2000 for two days in a row, and after testing 1930 with a tail candle or a decline for several candles, and here it coincides with the rise in interest and then the rise in unemployment rates, then we will say that 2100 is within reach.
Second scenario
In the event that gold tested 1930 and could not close above 2000, then we will see occasional trading that hits 1900.
In the near term, until the news is released and the conditions are met
Trading will remain confusing between a trend towards 2010 and 1975, so wait for the closing and retesting.
at the long term
Prices at the present time are not in favor of investment, as we advised investing when gold was at 1750 levels, and therefore we advise you if you are thinking of investing to wait until the middle of the fourth month.
Of course, we note that the continued repercussions of bankruptcy mean the continued rise in the price of gold, and that 2500$ is very close to that, because the inflation rate is not less than 30%, and gold did not rise by more than 10%.
Technical analyst opinion
In conclusion, dear trader, this period may prevail in the wrong opinion about anything and everything, because traders are divided into two categories, some of whom could not take advantage of the bullish market, and some of them did not expect this amount of rise, so be calm so that you can interpret the events better and do not fall prey to the media. or prey to passion.
Analyst: Omar Sayyah
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