With Q3 physical Gold
sales in the range of 1100 metric tons and mines production in the range of 800 metric tons with a falling USD price of Gold
raised some significant discussions about the Gold
price discovery being disconnected from the physical demand. In order to avoid any annoying conspiracy theory on this point and maybe proof that there WAS NO conspiracy on the Gold
price by whoever, I think it is reasonable to take a classical “Wyckoff” style look on recent price ranges using a weighted world currency basket. For the explanation of the classical Wyckoff Style semantics please consult http://www.hankpruden.com/MTWyckoffSchematics.pdf
or further readings on Hank Pruden’s homepage. From this chart we see the Goldprice moving from the upper trading range towards the lower trading range of the currency basket range. We see the classical selling climax low and the absolute (daily basis) low in July 2013. The whole April 2013 till today trading range is still inline with the classical behaviour of an Wyckoff accumulation phase. The requirement for the next “bull”-run would be a high volume
correction (JAC) above the resistance line and a correction back into the trading range. A further possibility (black) is ABC
correction towards the upper part of the trading range and the formation of a third creek like structure.
How does this correlate with Gold
in USD. Previously various people noticed a bullish 3 drives
structure (almost perfect) with the price target line shown in red. Considering the XAUUSD
correlation with the suggested JPY correction (one of my first charts here), both views/charts suggest a upward correction of the Gold
price. In the weighted world currency unit as well as in USD.