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Gold: The Real Virus Is The Fed



  • We had a volatile week last week, but it provided a huge opportunity for traders to take advantage of this collapse.
  • Today, the market has met the targets for the daily signals. The market tested the $1,664 area, with $1,627 the low.
  • Looking ahead, if the market closes above $1,654, it would activate the Sell 2 daily level of $1,665 and the weekly Sell 2 level for the rest of the week.
  • I do much more than just articles at Mean Reversion Trading: Members get access to model portfolios, regular updates, a chat room, and more. Get started today »

It may appear that the coronavirus caused the markets to collapse. A deeper analysis shows that the virus merely triggered a decline that has been building since 2008 as the central banks have increased debt to record levels around the world. However, whatever the real cause of the recent volatility - printing money or a spreading virus - the recent turmoil presents a major opportunity for traders. Without volatility, there are far fewer profits to be made. With the right tools, you can make some money.

Gold tested the $1,664 level. If the market closes above $1,654, it will activate the Sell 2 daily level of $1,665 and the weekly Sell 2 level at $1,736 for the rest of the week. If we close below $1,651, which is the weekly signal, it would negate this bullishness. If we close below $1,654, the daily Sell 1 level, it would negate this bullishness, and would also activate a bearish trigger. But first, let's look at the fundamentals and then we can delve more deeply into the technical analysis.


In relation to Friday’s collapse in the marketplace, I don’t think it had anything to do with the coronavirus. The virus was the straw that broke the camel’s back. The panic that began took the bandage off what is really under this market, which is massive debt. It is the real problem that central banks have been nurturing since 2008. The virus was just the element that revealed this serious problem. We cannot afford higher interest rates. The virus has triggered devaluation and an implosion in the equity markets.

In metals, we are getting a reaction to what central bankers will have to do. They will have to lower interest rates substantially, which puts the entire financial system into a precarious situation. It is going to be

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Analyst’s Disclosure: I am/we are long NUGT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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