I have heard it said that technical analysis is “Astrology for Men”, the inference being that it’s got about as much use as arguing something will happen to the markets because the stars say it will.
Keen to dispel this myth, I decided to chat with chart expert Patrick Karim so we could explain exactly why there’s a lot more to technical analysis than a few nice colours and shapes on the screen. As ever Patrick was a great teacher and was able to quickly and succinctly explain how we can use charts to help us to understand what is happening with markets and, more specifically, to understand gold’s past and future performance.
Explaining how to read charts by looking at the Physical Gold and Silver Trust chart, as well as the historical gold price, Patrick explains how we look out for and expect breakouts, and where he thinks the gold price is heading next.
Charts are, as I explain, a depiction of the emotion in the market. Very often it is too easy to forget that markets are traded based on emotion so any pictorial depiction of this is a great tool to appreciate how those emotions have and will affect asset price performance.
We bring you a technical analysis chat every month, but if you’ve been finding that they don’t always help you to understand the whole picture, or that your chart knowledge needs a refresher, then this is a great interview to take some time to watch.
As ever, let us know what you think and if you learnt anything new.
In markets today:
Both gold and silver December-futures hit a three-week low yesterday. Some risk-appetite appears to be tiptoeing back into the market, due to no significant escalation in the war in the Middle East. Prices are also not finding much support given central banks signalling that they have no intention to reduce interest rates any time soon.
Markets do not appear to be pricing in the ever-increasing possibility of a US government shutdown, happening next week. However, as we get closer to the House of Representatives November 17th Deadline, we expect to see some upward pressure on the gold price.
An interesting report yesterday, published by the Silver Institute, found that demand for silver over the next decade will far outpace the demand seen in the last ten years. They forecast a growth of over 40% in demand from industrial, silverware and jewellery sectors.
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GOLD PRICES ( AM/ PM LBMA FIX– USD, GBP & EUR )
| USD $ AM | USD $ PM | GBP £ AM | GBP £ PM | EUR € AM | EUR € PM | |
|---|---|---|---|---|---|---|
| 08-11-2023 | 1960.10 | 1959.35 | 1599.64 | 1595.89 | 1837.99 | 1833.36 |
| 07-11-2023 | 1967.80 | 1960.70 | 1598.44 | 1594.44 | 1839.70 | 1836.39 |
| 06-11-2023 | 1987.10 | 1984.60 | 1600.41 | 1601.57 | 1848.20 | 1847.86 |
| 03-11-2023 | 1988.50 | 1994.45 | 1627.59 | 1615.90 | 1868.20 | 1860.42 |
| 02-11-2023 | 1986.70 | 1983.60 | 1629.49 | 1628.54 | 1869.48 | 1864.58 |
| 01-11-2023 | 1982.50 | 1986.35 | 1633.38 | 1634.17 | 1879.61 | 1881.47 |
| 31-10-2023 | 1997.60 | 1996.90 | 1638.43 | 1645.05 | 1873.55 | 1883.48 |
| 30-10-2023 | 1996.15 | 1997.60 | 1645.83 | 1644.82 | 1886.56 | 1883.14 |
| 27-10-2023 | 1987.60 | 1982.90 | 1636.99 | 1631.93 | 1881.26 | 1873.64 |
| 26-10-2023 | 1991.45 | 1975.00 | 1647.13 | 1630.96 | 1888.09 | 1874.67 |
| 25-10-2023 | 1970.15 | 1983.30 | 1625.18 | 1635.03 | 1864.16 | 1876.20 |
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