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Gold - 16/10/2020

Micro Analysis

16 October, 2020

For General Information only. Not Intended to Provide Trading or Investment Advice. Your Capital is at Risk.

Gold Statistics (Period September 2018 - September 2020): Five Major Downward Corrections Within Gold’s Longer-Term Uptrend

  • LONG TERM UPTREND (BULL MARKET): Gold has kept its longer term uptrend, which has started in late 2018 at around 1200, to recently break above the mark of 2000 and test a record high of 2074 (August, 2020).
  • RECENT INCREASE: Gold has continued to benefit as safe-haven instrument amid ongoing global economic crisis, caused by the COVID-19 Pandemic and subsequent lockdown measures implemented by the governments to prevent the spread of the virus.
  • PURPOSE OF ANALYSIS: The purpose of this analysis is to show the way how Gold managed to keep recovering from its short term downward corrections to preserve its longer term uptrend. The price of Gold had upward movements in this period as well and this is illustrated in the Graph (Gold, Weekly). Consequently, future price movements are hard to predict.
  • NUMBER OF DOWNWARD CORRECTIONS: According to our analysis, Gold has had five major downward corrections in the period between September 2018 and September 2020.
  • CORRECTION TIME SPAN: On average, Gold spends 8.4 weeks in correction.
  • PERCENTAGE PRICE CHANGE AMID DOWNWARD CORRECTION: On average, Gold would suffer a 7.92% downward correction before it starts to recover.
  • TIME TO RECOVER: On average, it would take 3.75 weeks for Gold to fully recover.
  • AUGUST, 2020 CORRECTION (RECOVERY IN PROGRESS?): Gold has started its latest downward correction in August, 2020 (at $2026.62) to hit a low of 1848.33 in September, 2020 (Price Change= - 8.80%). Assuming that the downward correction is over, Gold is now in its third (3) week of recovery.

Table I: Gold Downward Corrections and Recovery Process Amid Strong Bull Market (September 2018 - September 2020)

Start Correction Date

Correction Time Span: Weeks

Start Correction Price

Low Price

Percentage Price Change

Weeks To Recover

February, 2019

12

$1,327

$1,266

-4.61%

4

September, 2019

15

$1,547

$1,445

-6.56%

4

March, 2020

2

$1,700

$1,451

-14.65%

5

May, 2020

3

$1,758

$1,671

-4.99%

2

August, 2020*

10

$2,027

$1,848

-8.80%

IN PROGRESS

Average Price Change

-7.92%

Average Correction Time Span

8.4

Average Weeks To Recover

3.75

Data Source: Fortrade MetaTrader4

*- August 2020 Recovery Is Assumed To Be In Progress.

Please note that past performance does not guarantee future results.

Technical Overview: Gold Bull Market September 2018 - September 2020

The chart below shows the five occasions when Gold has downwardly corrected in the period between September 2018 and September 2020. The corrections are well depicted by gray rectangles and numerically explained in Table I.


Graph: (Gold, Weekly)

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