China Gets The Gold – U.S Stays Afloat

Not to shabby really. Two full weeks without a trade alert posted, and Monday the Nikkei closes down some -450 points. I hope you got the tweet. Of the 13 pairs suggested I think maybe “one” didn’t move directly into profit within the first few hours of trading.

A wonderful entry sure, but in this day and age you can’t just rely on that. Would it shock me to see the entire move 100% completely retraced  by tomorrow afternoon? Not in the slightest.

Interesting to see, that of the “safe havens” outlined in a post a few days ago – ALL managed yo move higher as risk aversion took center stage. The U.S Dollar, Bonds, Yen and Gold all moving higher as suggested ( I hope you’ve taken something away here –  a nice lil nugget found laying in the dirt.)

There’s been some talk that the “age-old correlation” between the price of gold and the value of the Australian Dollar has once again “found its way” as the Aussie continues to exhibit “some degree of strength” in a “risk off ” environment. Personally I’m not holding my breath as ( call me crazy but…) I’ve formulated some idea as “what the hell has been going on with Gold” and it doesn’t involve Australia.

Has anyone else considered that the Fed / U.S has actually been “allowing” China to buy gold on the cheap as a backroom / side deal  / means to convert / smooth out the waters as opposed to seeing China dump USD as well as future bond purchases?

Makes perfect sense to me. China says “moving away from USD as well no need for more US denominated debt”, U.S has a heart attack and swings a deal to actually “give” China whatever remaining gold is available for the lowest price possible?

The more I think about – the more sense it makes.

You won’t tolerate our “money printing any longer” so…..please don’t drop the hammer on us just yet – “here’s all our gold reserves as well”.

Manipulation ( short selling in the paper market ) essentially giving China the means to buy gold on the cheap as opposed to more U.S denominated debt no?

I’m positive this has absolutely nothing to do with the Australian Dollar and caution that people are at least “open to the idea”. Call me a wack job……fair enough.

We’ll take it day by day but as it stands, all “short AUD” entries look fine here as of this morning

Gold will be gold, and I’m quite certain the Aussie will continue to find itself on its own “downward trajectory”.

28 Responses

  1. Power Corrupts January 14, 2014 / 6:18 am

    China? Maybe… I just have this image of some English wanker with bad teeth (apologies in advance to any Brits reading this, but it’s a stereotype I can’t banish) sitting at a trading desk somewhere in the Financial District hitting his SELL key every 15 minutes.

  2. Eric S. January 14, 2014 / 9:36 am

    Makes total sense to me. US is just forestalling the end by selling the gold. Eventually, when China has enough gold and has completed all their trade direct agreements..then the hammer drops and they will want to be the reserve currency based on gold.

    • Forex Kong January 14, 2014 / 9:56 am

      Yes the accumulation of Gold to back the currency but I’m quite certain China “isn’t interested” in becoming the world’s reserve (as this responsibility brings with it a number of things I “don’t” think the Chinese want).

      In any case, the huge move to grab gold / back the Yuan will be a tremdous boost to it’s use globally. Wow…’s already becoming very widely accepted….very, very quickly.

      • JSkogs January 14, 2014 / 10:52 am

        Interesting thoughts Kong and all. Thanks.

        Now the next day or so is probably time to beef up yen longs I’m thinking?

        • Forex Kong January 14, 2014 / 10:55 am

          I love everything I’m seeing regardless of “hooow sloooooooow its moooooving” so…

          Ya man….I’m still wary / gun shy stepping on the gas “too hard” but am on it literally minute to minute this week.

          I don’t want to miss a single pip of this one.

          • Forex Kong January 14, 2014 / 10:58 am

            As well ( for Schmed too ) if you guys keep your eyes on Japanese Candlestick formations….

            “AUD/USD pinbar” on the weekly.

      • JSkogs January 14, 2014 / 11:09 am

        Ya man this could be a killer trade. Minute to minute for me too bro. Gotta get it right.

        I use candlesticks for sure but haven’t been following usd crosses for awhile now. Really appreciate the tip. Thank you

        • Forex Kong January 14, 2014 / 2:00 pm

          NZD/USD pinbar on daily as well….up at very recognizable area of resistance.

      • JSkogs January 14, 2014 / 7:52 pm

        Thank you. I’m in it. Looks like a nice set up. I’m praying for a pop and drop during American trade tomorrow. Imma load up me some more yen longs. Kept my trades thin thinking that this would be a challenging but rewarding process. So far so good and I’ve got 90 percent cash still. I’ll kick the positions up if I see some ugliness. I want to start 2014 with something to get pumped about!

        • Forex Kong January 14, 2014 / 7:57 pm

          All toll Im a couple hundred pips in profit with the majority being the short AUD pairs.

          Many pairs more or less retraced 100% today so…..I “may” bank and reload – or just keep an eye open this evening as…we know what happens during the U.S session.

          Ideally I’d like to get this one right….and try to hang on to it for several weeks but…we also know “that’s not always a good idea”.

      • JSkogs January 14, 2014 / 8:08 pm

        Ya good plan. Yesterday I booked CADJPY just to ensure I booked something and made use of the money. I had a nice run with it. I’m still in audusd audjpy nzdusd. The usd trades werr entered today as per your tip and thank you for that. Hoping to re enter yens tomorrow. Sort of looks like a spx pop through resistance and fade set up but ya you know the American drill

        • Forex Kong January 14, 2014 / 8:18 pm

          U.S Session wash / rinse / repeat today for sure – and nothing new at all.

          Go go go man….hope yer making some buks.

  3. JM January 14, 2014 / 11:48 am

    Absolutely great! This is genius, I’ve been torturing my head to understand how this manipulation could come to an end, and there you are.

    • Forex Kong January 14, 2014 / 11:52 am

      He he he….I cant tell if you’re being sarcastic!

      Anyway….It makes sense to me!

  4. schmederling January 14, 2014 / 8:59 pm

    Hey Dr. Kong….. been battling a cold the last 36hr….. winter here has finally got the best of me…LOL Seeing the pop across the board has me thinking….. great post…. lets see what the next 48hrs brings us running into Thursday……. Still holding….

    Cheers Schmed,

    • Forex Kong January 14, 2014 / 9:03 pm

      Just concerned about your “AUD” plans…as – short has been my biggest mover here last 24 hours.

      • schmederling January 14, 2014 / 9:31 pm

        Yeah – I will see what the next little while brings…. has pulled a U-Turn over the last 2 days & brought the daily fire back to neutral position relative to a fire….. ( Positive ) If we hit the lower BB I will most likely have to bail & re-group…

  5. Russell Oz January 15, 2014 / 3:49 am

    For all you weirdo’s say that the AUD does not follow gold or visa/versa, history shows me that where-ever the AUD/gold price goes, so goes the Gold/aud price. It is a FACT.

    As for the weekly pin bar on AUD, I see a VERY similar weekly pinbar on gold, silver and the NZD (the NZD is even MORE correlated to gold than the AUD incidently).

    Personally, I see the AUD headed for 80 cents and below (possibly down to around 70 cents US), and gold below $1,000 (possibly down to around US$800).

    If you follow the AUD, you MUST follow gold.

    • Russell Oz January 15, 2014 / 3:50 am

      mmmmm I am also known here as ezyfx

    • Russell Oz January 15, 2014 / 3:54 am

      I continue to buy physical gold weekly, regardless what the market is doing.


  6. Farhan Nasir (@FaniNasir) January 15, 2014 / 5:29 am

    hey kong ,, how are you ..
    was looking at GBP/NZD and saw that its currently floating over a previous strong support ,, so what do you think about this ,, cos i think that its a good opportunity for long ,, ..

    • Forex Kong January 15, 2014 / 5:36 am

      I wouldn’t be taking a long trade here Farhan…as the trend ( since our last trade in this pair ) now appears a series of lower highs and lower lows. ( check a 1 H time frame ).

      This has been a nice move up…more to go? I’m sitting out.

      • Forex Kong January 15, 2014 / 5:38 am

        Oooops GBP/AUD…

        And /NZD also – not a trade that I’m taking today.

  7. Farhan Nasir (@FaniNasir) January 15, 2014 / 5:57 am

    haha ok ,, you are the expert ,, the trades you suggested well USD/JPY well it went up ,, and NZD/JPY also flew high just entered short NZD/JPY.. your comments ,,

  8. Farhan Nasir (@FaniNasir) January 15, 2014 / 6:02 am

    but if daily candle in GBP/NZD closes above currents price then do you think there might be a chance to go long ??

  9. Careydina January 15, 2014 / 9:07 am

    Hello Kong,

    How are you today? Must be very cool for you today right? 🙂

    I’ve taken profit on my aud/jpy, gbp/usd and eur/usd today. Thinking to short aud/usd but still sitting to watch it. Haha…
    Good luck to everyone!

    • Forex Kong January 15, 2014 / 9:24 am

      It is cool here today yes!!

      A nice break really so…I’m ok with it.

      Great work Careydina…some nice profits across the board and several more opportunities shaping up.

      I’ve taken profits across the board , and have already re entered short AUD/USD as well NZD/USD with smaller orders, and watching very closely.

      • Careydina January 15, 2014 / 6:44 pm

        I decided to take a shot before the news come. OMG! Aussie suddenly dropped so much!!! Well taken the profit within 5minutes. Haha

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