Quick Analysis on Sticky Gold (chart)

A very quick chart for Gold price (in USD/oz) to demonstrate the gold doldrums. For those who debate Gold's proper value : the market says it is fairly priced at around $1,200/oz. The graph below shows the sample of the mid-point price points for this year, expressed as a percentage of all price samples. The underlying data is for XAU_USD currency pair, from Oanda's trading platform, analysis of all M1 intervals available for calendar year 2015 to date.


$30 range around $1200/oz is highlighted in yellow.
Data points are for Jan - May 2015, from Oanda.


Still working on how to best analyse these, except to suggest that 1180 and 1250 levels are the levels to watch and might be good resistance points in the short term, e.g. Gold failed to break 1180 yesterday and bounced. Take my chart analysis with a grain of salt however - since I have nowhere near the level of Technical Analysis skills that GM Jenkins has - I'm just filling in for him since according to his Agent he is currently banned from the public library for two overdue books!

Reason for posting - if anyone has these type of charts automatically built into their trading client (as I think some do), I'm interested in knowing how best to use them. I can offer more data transforms in future posts, in return.

Best regards,
Warren James

---------- Update: Sunday 31st May

as per discussion below I've been playing with charting on the same candlestick range for tick volume from the Oanda platform (calendar year of 2015 to date) > the purple chart compares total volume for each particular price point compared against other prices. I think this is the one which shows in some trading clients. The largest volme spike occurs near the lowest point seen this year for gold. I'm not a long term trader so this is presented without comment.


7 comments:

AdvocatusDiaboli said...

Hi Warren,
very nice&interesting approach. I got one question, are the percentage price samples based on the single trades or traded volume? How would the other chart look like, the same or would it deviate?
In case it is unclear what I mean: Imagine 1trade of 1ton at $1200 and the second 1trade of 1kg at $1100. If it is trade based the "average" would be $1150, if volume based something like ~$1199.
Greets, AD

Warren James said...

Hi AD,

This chart is only showing the midpoint between bid and ask for a 1-minute interval, it doesn't show trading volume. So yep, in your example if both trades were executed in the same minute timeframe then yes the price sample midpoint would show as $1150 and on the charts there would be painted a crazy-arse $100 spike which would make the Swiss de-pegging event look tame by comparison [ p.s. Candle height is another aspect available and I hope to do more posts on this research ].

Typically, the broker never shows actual amounts traded - that's known only to them - we only ever see 'tick volume' which is the number of times price changed to clear the market at that point (and someone can correct me but as far as I know, the tick volume is specific to the trading provider).

We do have tick volume in the same data set and I will attempt over the weekend to do a second graph which incorporates that. I would imagine it gets clustered in the same region around $1,200/oz since in the last couple of months there's been a whole stack of 'running the stops' as the price has been oscilating around the 1200 point.

Best, Warren

Warren James said...

Last night, gold swept through $1280, will be interesting to see where the price settles here. Bzased on the chart above it won't stay in this 1170 - 1180 region for long - NonFarmPayrolls news event on Friday should knock it into whatever equilibrium level.

Gary said...

The 'USTs priced in silver' ratio is at 1.45, maybe the trend line gets hits this time Warren?

Gary said...

Intra-day the ratio is now at 150.8, so.....let us see.

Grumps LaBastard said...

The miners have held up surprisingly well. There is no volume except for some select quality juniors that are actually going up, but you wouldn't know it by looking at the GDXJ.

And there are times when the inverse correlation of gold miners versus general equities really shines, so I'm not sure if the goldies will get dragged down with a S&P crash. It seems the machines are ready to reverse the short HUI/long S&P trade at the drop of a hat. Though I'm still planning for a drop in the HUI to about 125. Hopefully it's not an intraday spike low, so I can put one last tranche of money in my gold funds.

https://www.elliottwavetrader.net/images/charts/full-sgeRdu37mcLDI8t5c8lEI.png

I don't agree with this chart. If gold is 12K ten years from, the HUI is going to be much more than 2000. Hell, if gold only gets to 1700 then HUI is easily in the 400s.

Warren James said...

Gold popping its head back above $1185 ... I should have placed a trade on that, based on my own chart .. unfortunately I thought it was headed to a new equilibrium below $1160. Maybe $1163 was the new low that GM alludes to ??

The Spike from NFP last Friday was a really strange beast - my next post is going to be on Spikes in XAU_USD!