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Possible Hope For Gold

Forex Kong 13 Comments

It’s been some long and grueling months for gold traders, and those watching PM’s and the miners in general. Week after week of potential bottoms or reversals – only to be followed by  selling, selling and more selling. The price of both silver and gold in the “paper markets” passed the point of “rational” some months ago with seemingly no end in sight – a real tough spot for those holding strong…for sure.

We touched on this some weeks ago in that the problem with todays “investing environment” is that it “isn’t rational” – not in the slightest bit! With the amount of global stimulus being pumped into markets / Central Bank intervention etc – this isn’t in any way the market that most of you may be accustomed to investing in. Looking for similar results as one has experienced in the past has likely been recipe for disaster.

The fundamental reasons for owning gold have not changed, and likely grow stronger by the day as “paper money” planet wide is printed like toilet paper with hopes of keeping the ship sailing in the right direction just a little while longer.

How do you keep your sanity as a trader of Gold?

I would advise dropping your expectations. As simple as that.

I find it pretty unlikely that anyone is going to “time the trade” and make some massive “get rich quick” type thing any time soon with the purchase of Gold – however…..if one can lower their short-term expectations and try not to “treat it like a trade” – there’s plenty to made…….. if you can remain patient.

With the US dollar moving considerably lower over the next few months – this may be a decent time to start building positions – but in all…..we could just as easily see Gold consolidate here for months, and months on end. One needs to realize the Fed’s agenda and how a blatant rise in the price of Gold seriously undermines the goal of crushing USD – so as long as Ben’s got his finger on the printing presses – It’s hard to imagine gold getting too too  far out of the gates.

Strategic Positioning in a Manipulated Gold Market

Dollar Weakness Creates Tactical Opportunities

The Dollar Index (DXY) has been showing clear signs of structural weakness, particularly against commodity currencies like the Australian and Canadian dollars. When you see AUD/USD and USD/CAD making sustained moves that correlate with gold’s underlying strength, you’re witnessing the market’s attempt to price in real debasement despite the paper suppression. Smart money isn’t just buying gold outright – they’re positioning in currency pairs that benefit from dollar weakness while maintaining exposure to commodity strength. The EUR/USD has been grinding higher despite Europe’s own monetary mess, which tells you everything about how weak the dollar’s foundation really is.

What most retail traders miss is that gold doesn’t trade in isolation. It’s part of a broader currency ecosystem where central bank policies create ripple effects across multiple asset classes. When the Fed continues quantitative easing while simultaneously trying to suppress gold prices through paper market manipulation, they create arbitrage opportunities in the FX markets that savvy traders can exploit. Look at how GBP/USD moves in relation to gold spikes – there’s often a lag that creates profitable entry points for those paying attention.

The Carry Trade Unwind and Precious Metals

Here’s what the mainstream financial media won’t tell you: the massive carry trades built on cheap dollar funding are starting to unwind, and when this accelerates, gold will benefit regardless of paper market shenanigans. Japanese yen strength against the dollar isn’t just about Bank of Japan policy – it’s about global deleveraging that forces money back into hard assets. USD/JPY has been one of the most manipulated pairs over the past decade, but even central bank intervention has limits when fundamental forces align.

The real tell is in the emerging market currencies. When you see sustained strength in currencies like the Brazilian real or South African rand against the dollar, despite their own domestic challenges, you’re witnessing capital flows that understand the dollar’s long-term trajectory. These countries are major gold producers, and their currency strength often precedes significant moves in gold prices by weeks or even months. BRL/USD and ZAR/USD aren’t pairs most retail traders watch, but they’re leading indicators for anyone serious about timing precious metals entries.

Central Bank Gold Accumulation vs. Public Perception

While Western central banks play games with paper gold markets, Eastern central banks continue accumulating physical gold at unprecedented rates. This creates a disconnect that shows up in currency flows before it shows up in gold prices. Watch the Chinese yuan’s movements against the dollar – when USD/CNY weakens consistently, it often coincides with periods of Chinese gold accumulation that eventually pressure paper markets higher.

The Russians have been even more aggressive, using gold purchases as a tool of monetary policy while simultaneously working to undermine dollar hegemony. This isn’t just about portfolio diversification – it’s economic warfare played out through currency and commodity markets. When you see unusual strength in RUB/USD despite sanctions and geopolitical tensions, it’s often because gold backing provides real stability that paper currencies can’t match.

Timing Your Gold Exposure Through Currency Signals

Instead of trying to catch falling knives in gold directly, use currency markets as your early warning system. When you see coordinated weakness in the Dollar Index combined with strength in commodity currencies and unusual flows into traditional safe havens like the Swiss franc, you’re getting advance notice of gold’s next move. CHF/USD strength despite Swiss National Bank intervention is one of the clearest signals that smart money is positioning for dollar debasement.

The key is building positions gradually while monitoring multiple currency pairs for confirmation. Don’t wait for gold to break through obvious resistance levels – by then, the easy money has been made. Watch for EUR/GBP stability combined with EUR/USD strength, which indicates European money is flowing away from both British and American assets toward something else. That something else is often precious metals, even if the move doesn’t show up immediately in gold futures markets.

Remember, we’re not trading in free markets anymore. Every major currency and commodity market shows signs of intervention and manipulation. But these distortions create opportunities for those willing to look beyond the obvious and position themselves ahead of the inevitable adjustments that must come.

Goldbugs – You Just Don't Get It

Forex Kong 4 Comments

I’m going to try and go easy – as I know many of the readers here are very much so invested in Gold. As well please keep in mind – I too believe in the long term story.

But with such macro forces at work –  it absolutely pains me to envision you sitting there at home, considering every little tick up and down, gaps, bollinger bands, cycles, COT, and the most ridiculous of all – “selling on strength and buying on weakness numbers”  – on “paper gold” through GLD!

It’s Ridiculous! Stop it! Stop it right now!

I’ve even heard some of you consider that Uncle Ben’s 85 billion dollars a month could in some way be “good” for gold prices??  Have you lost your mind? Seriously! It’s 100% completely the opposite!

Ask yourself this: Who on earth could believe the dollar’s exchange rate in relation to other currencies if the dollar was seen collapsing in value in relation to gold and silver?

This would completely defeat the money printing effort of the Fed – and completely undermine the bond buying!

The Fed is a private bank! with one goal and one goal only – to profit! They can’t possibly let the value of gold skyrocket if they intend to kill the U.S dollar! Think about it!

So……The Federal Reserve uses its dependent “wallstreet bank buddies” to short the precious metals markets. By selling naked shorts in the paper bullion market against the rising demand for physical possession, the Federal Reserve is then able to drive the price of gold down.

Bullion prices take a big hit, bullishness subsides and the flow of dollars into bullion is stopped….and the money printing can continue.

As long as the Fed continues to print ( and soon looks to print more ) I am at odds with any suggestion that gold will do anything more than trade flat at best.

In any case – bring it on then……I’m ready.

The Real Game: Currency Wars and Gold’s Controlled Demolition

Dollar Index Strength Through Precious Metal Suppression

Here’s what most traders refuse to acknowledge: the DXY isn’t climbing because of economic fundamentals or interest rate differentials. It’s rising because the Fed has weaponized gold suppression as their primary tool for maintaining dollar hegemony. Every time we see coordinated selling pressure in the futures markets – particularly those convenient 3 AM EST raids when London opens – we’re witnessing central bank policy in action. The algorithm-driven sell orders flooding the COMEX aren’t random. They’re surgical strikes designed to break technical support levels and trigger stop-loss cascades among retail traders who still think they’re playing in a fair market.

Watch EUR/USD, GBP/USD, and AUD/USD closely when gold gets hammered. Notice how these pairs immediately strengthen against the greenback? That’s not coincidence – that’s coordination. The European Central Bank, Bank of England, and Reserve Bank of Australia are all complicit participants in this currency stabilization scheme. They need dollar strength just as much as the Fed does, because a collapsing reserve currency would drag their export-dependent economies into the abyss.

The Paper Gold Manipulation Playbook

Let me spell out exactly how this manipulation unfolds, because understanding the mechanics will save you from getting steamrolled. The bullion banks – primarily JPMorgan, HSBC, and Scotia – hold massive short positions in COMEX gold futures that dwarf actual physical supply. These aren’t hedged positions. They’re naked shorts backed by nothing more than the implicit guarantee that the Fed will intervene if delivery demands threaten to expose the fraud.

Here’s the playbook: Phase one involves accumulating short positions during Asian trading hours when volume is thin. Phase two launches the coordinated selling assault just before key technical levels, ensuring maximum psychological impact on momentum traders. Phase three deploys mainstream financial media to reinforce the narrative that gold’s decline reflects “improving economic conditions” or “reduced inflation expectations.” It’s textbook market manipulation, executed with military precision.

The most insidious part? They’re using your own money against you. Every ETF purchase of GLD or IAU provides more ammunition for the shorts. You think you’re buying gold exposure, but you’re actually funding the very mechanism designed to suppress gold prices. The physical metal backing these ETFs can be hypothecated, rehypothecated, and leased out to the same bullion banks shorting the market.

Currency Pair Correlations Reveal Fed Strategy

Smart forex traders should be watching gold’s inverse correlation with carry trade currencies like AUD/JPY, NZD/JPY, and GBP/JPY. When precious metals get crushed, these pairs typically rally as risk appetite returns to the market. But here’s what’s really happening: the Fed’s gold suppression creates artificial confidence in paper assets, driving capital flows back into higher-yielding currencies and away from safe havens.

The Japanese yen becomes particularly important in this dynamic. Every time gold threatens to break higher, watch for mysterious strength in USD/JPY that has nothing to do with Bank of Japan policy or Japanese economic data. The Fed and BOJ have a coordinated arrangement – dollar strength against the yen helps maintain the illusion of American economic superiority while keeping Japanese exports competitive. It’s a win-win that requires keeping gold firmly under control.

The Endgame: Physical Shortage Will Trump Paper Games

But here’s where this whole scheme eventually falls apart, and why I’m positioning for the inevitable reversal. Physical demand from China, India, and Russia continues accelerating regardless of paper price manipulation. The Shanghai Gold Exchange now trades more volume than COMEX, and they demand actual delivery. Central banks worldwide have been net buyers for over a decade, quietly accumulating while publicly dismissing gold’s monetary role.

The mathematical reality is brutal: global mine production peaked in 2018, recycling flows have declined, and industrial demand from technology sectors keeps growing. Meanwhile, the paper gold market has created synthetic supply that’s roughly 100 times larger than deliverable physical inventory. When this fractional reserve system finally breaks – and it will break – the price reset will be violent and swift.

Until that breaking point arrives, respect the manipulation but don’t get married to losing positions. Trade the trend, not your beliefs. The Fed’s gold suppression strategy is working exactly as intended, keeping currency markets stable while they continue printing trillions. Fighting this beast requires patience, proper position sizing, and perfect timing. Most traders have none of these qualities, which is exactly why this system persists.

Gold Trade – For The Last Time

Forex Kong Got something to say?

I suggested some months ago to buy gold and gold related stocks. Since then the price of gold, and performance of the related miners has gone nowhere but down…and down….and then down even more.

I lost $1500.00 bucks in options that expire today – likely the largest “losing trade” I’ve made in many months.

Putting this in perspective – I see $1500.00 (+/-)  flash on my screens  a few times a week (if not daily) as it represents “peanuts” in the grand scheme of things. I spent about a week watching the trade go against me before I put it aside in the “whatever” category and got on with my work – banking some of the best returns of my life over the same period of time via the currency trading.

The plain fact of the matter is… regardless of price – in the current “print til you can’t print anymore” environment – there is absolutely no reason to own gold. There is no fear. There is no “need to store value” while stocks are blasting to the moon! People (including myself) are making money hand over fist in a number of areas as gold bugs continue to debate/rationalize/haggle the reasons as to why their “all in bets” on the shiny metal haven’t made them rich – but more so bust their accounts.

Its foolish investing. It’s gambling. It’s naive and its completely irresponsible.

Bottom line – gold will make it’s move when stocks and “risk” tanks. And from what I gather – the FED is gonna work pretty damn hard to make sure that doesn’t happen……. anytime soon.

I do plan to “re enter” and take another shot at gold and related names – but as seen a week ago when gold popped some 30 bucks on the big DOW DOWN DAY – it looks pretty obvious to me that we won’t see a move in gold – until we see some serious fear enter the market – regardless of where the USD is at.

 

The Real Money is in Currency Pairs – Not Shiny Rocks

Why USD Strength Crushes Gold Dreams

While gold bugs keep crying about manipulation and waiting for their “moon shot,” the smart money is riding the dollar’s relentless climb. The DXY has been an absolute beast, and when you’ve got a currency backed by the world’s most liquid markets and a Federal Reserve that’s proven it will do whatever it takes to keep the party going, why would anyone park capital in a dead asset like gold? The USD/JPY pair alone has provided more trading opportunities in the past six months than gold has delivered in years. Every time we see that classic risk-off move where yen strengthens, it’s a gift – because you know damn well the Fed isn’t going to let sustained dollar weakness happen. They’ll talk tough about inflation, but when push comes to shove, they’re printing money and keeping rates accommodative because the alternative is economic collapse.

The fundamental disconnect here is that gold traditionalists are fighting the last war. They’re positioned for 1970s-style stagflation when we’re living in a world of coordinated central bank intervention. The EUR/USD has been range-bound precisely because both central banks are playing the same game – keep liquidity flowing and asset prices elevated. There’s no currency crisis, no systemic breakdown, just managed decline with enough stimulus to keep the wheels turning.

Central Bank Coordination Kills Gold’s Narrative

Here’s what the gold crowd refuses to acknowledge: central bank coordination has never been tighter. When you’ve got the Fed, ECB, BOJ, and even the People’s Bank of China all committed to the same basic playbook – maintain financial stability at all costs – there’s no room for gold’s traditional safe-haven premium. The GBP/USD pair perfectly illustrates this point. Even with Brexit chaos, political uncertainty, and economic headwinds, the pound finds support because the Bank of England falls in line with global monetary policy. No major central bank wants to be the one that triggers a deflationary spiral by tightening too aggressively.

This coordination extends to currency interventions too. We’ve seen it repeatedly – any time there’s genuine stress in forex markets, central banks step in with coordinated action. The Swiss National Bank’s aggressive intervention in USD/CHF whenever it approaches parity shows you exactly how committed these institutions are to preventing the kind of chaos that would actually drive gold demand. They’re not going to let currency markets blow up when they can just print more money and buy more assets.

Opportunity Cost is Killing Gold Positions

Every dollar tied up in gold positions is a dollar not working in currency markets where real money gets made. Take the AUD/USD pair – it’s been a volatility machine tied directly to risk appetite and commodity cycles. While gold sits there doing nothing, Aussie dollar moves give you 100-200 pip opportunities multiple times per month based purely on sentiment shifts and China economic data. The carry trade opportunities in pairs like USD/TRY or USD/ZAR have been absolutely printing money for traders willing to take calculated risks on emerging market currencies backed by real yield differentials.

The cryptocurrency space has also stolen gold’s thunder as the “alternative store of value” play. Younger investors who might have traditionally bought gold as a hedge are throwing money at Bitcoin and Ethereum instead. They’re getting the anti-establishment narrative with actual price movement and profit potential. Gold’s just sitting there like your grandfather’s investment strategy – outdated and underperforming.

The Only Catalyst That Matters

The brutal truth is that gold needs a genuine crisis to move, and central banks have proven they’re willing to do whatever it takes to prevent those crises from developing. The moment we saw massive coordinated intervention during the 2020 crisis – unlimited QE, direct market purchases, unprecedented fiscal spending – it should have been clear that gold’s traditional drivers were being systematically eliminated. The VIX spikes that used to send gold soaring now just trigger more intervention.

When gold finally does move, it’ll be because something broke that central banks can’t fix with more printing. But betting on systemic breakdown while missing out on the incredible opportunities in currency markets is just bad risk management. The USD remains king, volatility in major pairs continues to provide trading opportunities, and emerging market currencies offer yield plays that actually pay while you wait. Gold offers none of that – just hope and prayer that the system collapses enough to justify holding a dead asset.

SDR's First – Then The Gold Standard

Forex Kong 3 Comments

Special Drawing Rights (SDR’s)

The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries official reserves.

Its value is based on a basket of four key international currencies, and SDRs can be exchanged for freely usable currencies. With a general SDR allocation that took effect on August 28 and a special allocation on September 9, 2009, the amount of SDRs increased from SDR 21.4 billion to around SDR 204 billion (equivalent to about $310 billion, converted using the rate of August 20,2012).

So in other words – the U.S has a printing press, the ECB has a printing press, Japan’s of course, Great Britain’s got one and the freakin International Monetary Fund ( operated primarily by a small group of “financial elite) can rattle off “SDR’s” and distribute them (as freely tradeable currency) to its members – at will.

This will clearly be the next step in resolving the current global financial crisis as the printing continues.

With everyone devaluing their currencies at the same time ( and Central Banks suppressing the value of gold as a price spike would undermine the entire plan) it’s very likely that the next “crisis” event will simply be “papered over” with the issuance of “SDR’s” and the “can kicking” will continue down the “global road”.

Anyone expecting some “massive rise in the price of gold” overnight –  is likely in for a longer wait in that……the “paper game” has miles to go before your “$7000 oz” will be realized. As well – if you live in the U.S, I’d look forward to any large profits being made  subject to a “newly formed gold tax” – likely in the neighborhood of 80%.

Have you considered that “the power’s that be” already have this worked out?

The SDR Endgame: What Forex Traders Need to Know

Currency Basket Dynamics and Major Pair Implications

The SDR basket composition tells you everything about where global monetary policy is headed. Currently weighted at roughly 42% USD, 31% EUR, 11% CNY, 8% JPY, and 8% GBP, this isn’t some academic exercise – it’s the blueprint for coordinated devaluation. When the IMF reviews this basket every five years, they’re essentially redistributing global monetary power. Smart forex traders are watching these weightings like hawks because they signal which central banks will be printing hardest.

Here’s what most traders miss: when SDR allocations increase dramatically, it creates artificial demand for the basket currencies in specific proportions. This means USD/EUR moves become less about individual economic fundamentals and more about maintaining the SDR’s stability. The ECB and Fed aren’t fighting each other anymore – they’re tag-teaming to keep their combined 73% SDR weighting stable while everyone else gets steamrolled.

The Petrodollar-SDR Transition Nobody’s Talking About

Saudi Arabia’s recent moves aren’t coincidental. The petrodollar system that’s dominated since 1974 is getting quietly replaced by a petro-SDR framework. When oil producers start accepting SDRs for crude, the entire forex landscape shifts overnight. This isn’t some distant possibility – it’s happening now through back-channel agreements that won’t hit mainstream news until it’s too late to position.

Watch the USD/CNY pair closely. China’s yuan inclusion in the SDR wasn’t about recognition – it was about preparation. Beijing’s been accumulating massive gold reserves while simultaneously promoting SDR usage in bilateral trade deals. They’re playing both sides: supporting the SDR system publicly while positioning for its eventual collapse privately. The PBOC knows exactly what they’re doing, and their currency intervention patterns reflect this dual strategy.

Central Bank Coordination: The New Market Reality

The days of independent monetary policy are over. When you see synchronized rate decisions across major central banks, that’s not coincidence – that’s coordination designed to maintain SDR stability. The Fed, ECB, BOJ, and BOE are essentially operating as branches of a single monetary authority now. Their “independence” is theater for public consumption while they execute a coordinated devaluation strategy.

This coordination explains why traditional carry trade strategies have been failing. Interest rate differentials that should drive major movements in pairs like AUD/JPY or NZD/USD get mysteriously dampened by “intervention” that’s actually coordinated SDR management. The volatility you’re seeing isn’t market uncertainty – it’s the controlled demolition of individual currency sovereignty.

Trading the SDR Reality: Practical Implications

Forget everything you know about fundamental analysis in major pairs. When central banks coordinate to maintain SDR basket stability, traditional economic indicators become meaningless. GDP growth, inflation data, employment numbers – they’re all secondary to maintaining the predetermined currency relationships within the SDR framework.

The smart money is positioning for the next phase: SDR denominated international trade. When this happens, currencies outside the basket become peripheral – literally. The CAD, AUD, CHF, and especially emerging market currencies will see increased volatility as they’re forced to peg informally to SDR movements rather than individual basket currencies.

Here’s your trading edge: monitor SDR allocation announcements and basket rebalancing dates. These create predictable flows into specific currency ratios that most retail traders completely ignore. When the IMF announces new SDR issuances, you can front-run the institutional buying that must occur to maintain basket proportions. It’s not speculation – it’s mathematical certainty.

The endgame is obvious: a global digital currency backed by SDRs, with gold reserves held by central banks as the ultimate backstop. Your trading timeframes need to account for this reality. Short-term trades based on technical analysis still work, but medium to long-term positions must consider the coordinated monetary policy environment we’re operating in. The “free market” in forex is dead – it’s been replaced by managed exchange rates designed to facilitate the transition to a new monetary system. Trade accordingly.

A Golden Hammer – Has Gold Bottomed?

Forex Kong 3 Comments

Hammer: Hammer candlesticks form when a security moves significantly lower after the open, but rallies to close well above the intraday low. The resulting candlestick looks like a square lollipop with a long stick. If this candlestick forms during a decline, then it is called a Hammer.

Has Gold Finally Bottomed?

Has Gold Finally Bottomed?

I’ll be the last one to call it as I am relatively new to the world of gold – but can tell you it’s been a complete and total grind for the past few months. This particular candlestick formation is usually a pretty good sign that buying interest has started to creep back in. Usually a trader will wait for an additional days candle to form (ideally closing above the high of the hammer) before entry.

If it provides any relief going into the weekend – I for one have considerable confidence that we should see some higher prices moving forward.

Reading the Gold Market Through Multiple Timeframes

Weekly and Monthly Context Matter More Than You Think

While that daily hammer formation catches the eye, smart traders know the real money is made when you align multiple timeframes. The weekly chart on gold has been painting a picture of consolidation for months now, grinding sideways between key support around $1,950 and resistance near $2,070. This isn’t random price action – it’s institutional accumulation disguised as boring sideways movement. When gold finally breaks out of this range, the move will be violent and swift. The hammer on the daily is just the first hint that larger players might be stepping back in.

Monthly resistance levels dating back to the 2020 highs are still intact, but here’s what most retail traders miss: gold doesn’t respect round numbers the way forex pairs do. It respects inflation expectations, real yields, and dollar strength. The monthly close will tell us everything we need to know about whether this hammer has any real conviction behind it. If we can’t close above $2,000 on the monthly, this bounce is likely just another head fake in a grinding consolidation.

Dollar Correlation: The Trade Within the Trade

Here’s where it gets interesting for forex traders. Gold’s inverse correlation with the dollar isn’t just textbook theory – it’s your roadmap to bigger profits. When gold shows strength via formations like this hammer, start watching DXY like a hawk. A breakdown in the dollar index below 103.50 would confirm what the gold hammer is suggesting: dollar weakness is coming. This sets up multiple opportunities across major pairs.

EUR/USD becomes immediately interesting on any dollar weakness confirmation. The pair has been coiled in a tight range, but break 1.0950 with conviction and you’re looking at a run toward 1.1100. GBP/USD follows similar logic – cable loves to run when the dollar shows cracks. But here’s the sophisticated play: if gold confirms its hammer with follow-through, short USD/JPY. The yen benefits from both dollar weakness and the risk-off sentiment that often accompanies precious metals rallies.

Central Bank Policy: The Fundamental Driver Everyone Ignores

The Federal Reserve’s next move is already telegraphed in gold’s price action. That hammer formation isn’t forming in a vacuum – it’s forming because smart money knows the Fed is closer to the end of their tightening cycle than the beginning of the next phase. Real interest rates have peaked, even if nominal rates haven’t. When real rates start declining, gold becomes the obvious beneficiary.

But here’s the twist most traders don’t consider: central bank gold purchases have been at multi-decade highs. Countries like China, India, and Turkey have been accumulating gold at unprecedented rates. This creates a fundamental floor under the market that technical analysis alone can’t capture. The hammer we’re seeing might be the market finally acknowledging this central bank bid that’s been building for months.

European Central Bank policy divergence adds another layer. If the ECB pauses their tightening cycle while the Fed continues, we get euro strength and dollar weakness – both bullish for gold. The timing of this hammer formation coincides perfectly with growing speculation about ECB policy shifts. Connect these dots and you start seeing the bigger picture.

Risk Management: How to Play the Confirmation

Waiting for confirmation above the hammer’s high is textbook, but here’s how professionals actually trade this setup. They use the hammer as an alert, not an entry signal. The real entry comes on the retest of the hammer’s low after we’ve seen confirmation. This gives you a much tighter stop loss and better risk-reward ratio.

Position sizing becomes critical here because gold can whipsaw faster than major currency pairs. Risk no more than 1% of your account on the initial position, then scale in if we get that confirmation candle closing above the hammer’s high. The beauty of this setup is the stop loss placement – you know exactly where you’re wrong if gold takes out the hammer’s low.

Set your profit targets at logical resistance levels, not arbitrary risk-reward ratios. First target sits at $2,020, then $2,070 if momentum continues. But remember: this isn’t just a gold trade. It’s a dollar-weakness trade disguised as a precious metals setup. Trade it accordingly.

Gold Rinse Job – Cruel Irony

Forex Kong Got something to say?

So I’m a fat cat on Wall Street  – that’s just seen two straight days of retail investment  pour into markets like liquid butta.

Can you get your head wrapped around the profits created (today alone) with respect to anyone who’d bought over the past two days and had a stop on their trade? Even a full 10% stop –  completely annihilated!

As well for those newbies still trying to make a buck trading EUR/USD – because your broker offers teeny-weeny pip spreads and the ability to scalp / short-term trade. No shit! – any wonder why?

You have now been liquidated on your 2k starter account as EUR/USD dives a full 250 pips!

So….has anything changed? Is the Europe story on the mend? Has the world lost its interest in gold?

Nope.

Everything is exactly the same as it’s always been  – as retail investment continues to fuel the engine of  the massive steam roller smashing you to bits.

It’s a sad truth…………..It’s a cruel….cruel irony.

The Retail Massacre Blueprint: How Wall Street Weaponizes Your Predictability

The Stop Hunt Symphony in Full Swing

What you witnessed isn’t some random market hiccup – it’s orchestrated carnage designed to harvest retail stops like wheat in October. Those algorithmic trading systems didn’t accidentally trigger every EUR/USD stop between 1.0850 and 1.0600. They mapped out exactly where amateur traders placed their risk management, then systematically destroyed each level with surgical precision. The beautiful irony? Retail traders actually telegraph their positions through order flow data that prime brokers sell to institutional clients. Your 50-pip stop loss on that “safe” long position became a GPS coordinate for the smart money demolition crew.

This isn’t your grandfather’s forex market where fundamental analysis and patient positioning ruled the day. Today’s battlefield is dominated by high-frequency algorithms programmed to exploit the mathematical certainty of retail behavior patterns. When 80% of amateur traders pile into the same EUR/USD long setup after two days of dollar weakness, institutional players don’t fight the trend – they become the trend reversal. The 250-pip nosedive wasn’t market chaos; it was market mechanics functioning exactly as designed by those who control the real liquidity.

The Broker Relationship Scam Nobody Talks About

Your broker’s marketing department loves showcasing those tight spreads and lightning-fast execution speeds, but they conveniently omit discussing their order flow arrangements with institutional counterparties. When you place that EUR/USD scalping trade, your position data becomes valuable intelligence sold upstream to market makers who can position against retail sentiment with overwhelming capital advantage. Those “teeny-weeny” spreads are loss leaders designed to attract volume, because the real profit comes from knowing exactly when and where retail traders will capitulate.

The cruel mathematics are undeniable: retail accounts with sub-$5,000 balances have a 99% failure rate within the first year, not because forex trading is impossible, but because the structural advantages favor institutional participants who can see your cards before you play them. Your broker isn’t your partner in profit – they’re your counterparty in a zero-sum game where information asymmetry determines winners and losers. When they offer you 100:1 leverage on currency pairs with 24-hour volatility, they’re not empowering your trading dreams; they’re accelerating your account destruction timeline.

Why EUR/USD Became the Retail Graveyard

Every forex education website pushes EUR/USD as the “beginner-friendly” currency pair because of its liquidity and lower spreads, but they’re essentially directing lambs to slaughter. This pair has become the ultimate retail sentiment barometer for institutional algorithms programmed to exploit predictable European session breakouts and New York reversal patterns. When economic fundamentals suggest dollar weakness, retail traders flood into EUR/USD longs with mathematical predictability, creating the perfect setup for coordinated institutional selling that obliterates stops and reverses trends within hours.

The European Central Bank’s monetary policy communications and Federal Reserve positioning create fundamental narratives that retail traders follow religiously, making their directional bias incredibly easy to predict and position against. Professional traders don’t trade EUR/USD based on what they think will happen – they trade it based on what they know retail traders think will happen, then position for the inevitable liquidation cascade when reality diverges from retail expectations.

The Unchanged Fundamentals and Permanent Advantage

Despite today’s market violence, European structural issues remain identical: unsustainable debt levels, demographic challenges, and energy dependence haven’t magically disappeared because algorithms pushed EUR/USD through key technical levels. Gold’s long-term monetary debasement hedge thesis stands unchanged regardless of short-term liquidation pressure from overleveraged retail positions and ETF redemptions. The fundamental drivers that created these trade opportunities still exist – only the market mechanism for expressing those views has been weaponized against undercapitalized participants.

Smart money doesn’t abandon sound fundamental analysis; they use retail traders’ fundamental ignorance and technical predictability as profit-generation tools. While retail accounts blow up chasing momentum and fighting algorithmic stop hunts, institutional players accumulate positions at optimal prices created by the very liquidation events that destroy amateur traders. The game hasn’t changed – only your understanding of who’s really playing it and why you keep losing has hopefully evolved after today’s expensive education.

Gold Stolen – Only The Aliens To Blame

Forex Kong 13 Comments

The theory that human beings are a product of alien genetic manipulation, and were more or less “created in their image” for the sole purpose of mining gold – is a personal favorite of mine. It keeps things simple, and provides me with the answers I need when gold goes off the charts  – as it has done overnight.

It’s simple. The gold has been stolen and we’ve only the aliens to blame.

The Illuminati’s “secret knowledge” of human creation (which defies both creationist and evolutionary theories)  is bound up in the tale of the Anunnaki, who according to the Sumerian clay tablets  – arrived around 6000 BC in Sumeria (modern-day Iraq).

A growing number of researchers say the Annunaki bred human slaves known in the Hebrew bible as “Adamu” and in English as “Earthlings” to mine gold necessary to the survival of their home world and it’s inhabitants.

Considering the slew of completely ridiculous “conspiracy theories” out there as to the “manipulation of gold prices” this looks to me as equally plausible in that – we still don’t know whether the reserves of gold “said to be there” in the United States – are really there at all.

So there you have it. Any time you get caught up in the minute to minute watching of the price of gold, or the endless debate over price manipulation or corrupt governments etc…just keep it simple.

Blame it on the Aliens.

I would love to enter the market here this morning – but just can’t pull the trigger in light of overnight action across the board. Dollar flat, equities up, currencies “wonky” ….and gold stolen by aliens makes me a touch nervous.

 

The Alien Gold Theory and Modern Forex Reality

When Ancient Manipulation Meets Central Bank Policy

While we’re blaming extraterrestrials for gold’s overnight surge, let’s get practical about what this means for currency markets. The USD/JPY pair has been dancing around like it’s receiving signals from another galaxy, and frankly, that’s not far from the truth when you consider how disconnected price action has become from fundamentals. When gold spikes this hard this fast, it’s sending a clear message about dollar weakness that every forex trader needs to decode. The Federal Reserve might think they’re controlling monetary policy, but if the Anunnaki are still pulling strings through their earthly proxies, then traditional technical analysis becomes about as useful as a chocolate teapot. The correlation between gold and the dollar index has been inverse for decades, but when alien intervention enters the equation, we’re looking at volatility patterns that would make even the most seasoned scalper’s head spin.

Currency Pairs in an Alien-Influenced Market

EUR/USD is behaving like it’s caught between two gravitational pulls – terrestrial economic data and otherworldly gold manipulation. The European Central Bank’s recent dovish stance should theoretically weaken the euro, but when gold is being systematically harvested by beings with technology that makes our smartphones look like stone tools, traditional monetary policy loses its grip. The Swiss franc, historically a safe haven that moves in tandem with gold, is now reflecting what might be the most honest price discovery we’ve seen in months. CHF/USD strength isn’t just about Swiss National Bank intervention or European uncertainty – it’s about traders unconsciously positioning for the reality that our planetary gold reserves might not be what we think they are. Meanwhile, the commodity-linked currencies like AUD/USD and CAD/USD are trapped in a paradox where mining stocks surge on gold fever, but the underlying question remains: are we mining for ourselves or for our cosmic overseers?

The Real Manipulation Game

Forget about traditional market manipulation theories involving London fixes and paper gold suppression schemes. If the Sumerian tablets are accurate, we’re dealing with a manipulation scheme that’s been running for over 8,000 years. The real question isn’t whether central banks are coordinating policy to suppress gold prices – it’s whether these same institutions are unknowingly serving a higher authority that views Earth’s gold reserves as a strategic resource for off-world purposes. The Bank for International Settlements, often called the central bank of central banks, coordinates global monetary policy with a level of synchronization that would make sense if they were following directives from a technologically superior civilization. When we see coordinated dollar strength or weakness across multiple currency pairs simultaneously, maybe we’re not witnessing sophisticated economic policy – maybe we’re seeing the execution of a resource extraction strategy that makes modern algorithmic trading look primitive.

Trading Strategy for an Uncertain Reality

Given this framework, the smartest play right now is defensive positioning across major currency pairs until we get clearer signals about whether this gold move has legs or if our alien handlers are just testing market liquidity. The carry trade has been dead for months anyway, so focusing on safe haven flows makes sense whether you believe in extraterrestrial intervention or not. Short-term scalping on GBP/USD might work if you can stomach the whipsaw, but longer-term trend following becomes nearly impossible when you can’t trust that the trends you’re seeing represent genuine economic forces rather than resource allocation decisions made light-years away. The best approach is to trade what you can see and measure while keeping position sizes manageable enough to survive whatever cosmic curveballs get thrown at the market. If gold continues climbing toward levels that would normally trigger massive dollar strength, but instead we see continued currency market confusion, that’s your confirmation that something beyond terrestrial economics is driving price action. At that point, the only rational response is to trade the chaos while acknowledging that our understanding of market fundamentals might be fundamentally incomplete.

Mining – Could it Be In Our Genes?

Forex Kong 9 Comments

Could the ancient astronaut theory hold true?

That thousands of years ago celestial vistors came to our planet in search of materials needed for their very survival – and in realizing the difficulties in extracting these materials from the ground, developed modern man to essentially do the hard work for them? When you really think about it…..it’s really not that far off.

As a young boy I remember a hoax that played out at my elementary school. A group of the older kids had painted a bunch of small rocks with gold model paint and hid them out in the sand of the school’s playground. Once the word got out….I recall the excitement and anticipation sitting there in my tiny desk, staring at the clock, squirming in my chair, waiting for the bell to ring. “Gold! Gold! – they’ve found gold in the playground!”.

We’d trip over ourselves racing out the door – eager to be the first to lay our hands on even the smallest spec of the glorious stuff. We spent hours on our hands and knees sifting, searching for our fortunes.

In the end…….I never found a single piece.

A silly young boy indeed –  but is it really any different now as adults?

Maybe mining is in our genes.

 

The Modern Gold Rush: Central Banks and Currency Devaluation

Fast forward decades from that playground hoax, and here we are—still digging, still searching, still chasing the glitter. But now the game has evolved into something far more sophisticated and infinitely more consequential. Central banks have become the ultimate puppet masters, painting worthless paper with the illusion of value while systematically devaluing the very currencies we work so hard to accumulate. The Federal Reserve, European Central Bank, and Bank of Japan have perfected the art of modern alchemy—turning debt into perceived wealth through endless money printing.

Consider the USD/JPY pair over the past decade. The Bank of Japan’s relentless quantitative easing programs have essentially turned the yen into fool’s gold, weakening it systematically against the dollar while Japanese citizens chase the mirage of economic recovery. Meanwhile, American workers dig deeper into debt, convinced that their dollars represent real value when in reality they’re holding painted rocks in a global monetary playground. The irony is profound—we’ve become the labor force extracting real value from the earth while our compensation becomes increasingly worthless paper.

The Extraction Economy and Forex Fundamentals

Every major currency pair reflects this extraction dynamic. The AUD/USD relationship perfectly illustrates how modern economies mirror ancient extraction models. Australia digs iron ore and gold from the ground, shipping real commodities to China, while receiving digital credits in return. When commodity prices surge, the Australian dollar strengthens—but what are traders really buying? They’re betting on Australia’s ability to continue strip-mining its continent for the benefit of global consumption.

The Canadian dollar follows similar patterns with oil and lumber extraction. CAD/USD movements directly correlate with crude oil prices because Canada’s entire economic model revolves around pulling black gold from tar sands. Norwegian krone, Russian ruble, Brazilian real—all these currencies dance to the tune of extraction. We’ve built a global financial system where success is measured by how efficiently a nation can rape its natural resources and convert them into fiat currency units that lose purchasing power annually.

Currency Manipulation: The Ultimate Hoax

The Swiss National Bank’s currency floor debacle in 2015 exposed the fundamental fraud underlying modern forex markets. For three years, they convinced the world that EUR/CHF would never break below 1.2000. Traders positioned accordingly, believing in the central bank’s commitment. Then, without warning, they abandoned the peg, causing one of the most violent currency moves in trading history. Billions of dollars in retail accounts evaporated instantly. Alpari UK, a major broker, collapsed overnight. It was the playground hoax scaled up to institutional levels.

This manipulation extends beyond single events. The Bank of England’s forward guidance, the ECB’s whatever-it-takes rhetoric, the Federal Reserve’s dot plots—all sophisticated versions of painting rocks gold and watching market participants scramble to position themselves accordingly. Professional traders know the game is rigged, yet we continue playing because there’s no alternative marketplace for capital allocation.

The Digital Mining Revolution

Bitcoin and cryptocurrency markets represent the newest evolution of this extraction mentality. Miners burn massive amounts of electricity to solve mathematical puzzles, creating digital scarcity from thin air. The BTC/USD pair has become the ultimate speculation vehicle—no underlying commodity, no government backing, purely collective belief in algorithmic scarcity. Yet traditional forex markets treat cryptocurrency adoption as a fundamental threat to fiat currency dominance.

Countries like El Salvador stacking Bitcoin reserves while simultaneously devaluing their domestic currency through dollar adoption creates fascinating cross-market dynamics. When analyzing USD strength against emerging market currencies, we must now factor in Bitcoin accumulation strategies and their impact on capital flows. The playground has expanded beyond Earth’s physical resources into digital realms where mining operations consume entire power grids.

Breaking the Cycle

Understanding this systemic extraction model provides tremendous advantages in forex trading. Every major economic announcement, every central bank meeting, every geopolitical crisis ultimately revolves around resource control and currency devaluation strategies. Successful traders position themselves ahead of these extraction cycles rather than chasing painted rocks after the hoax is revealed. The question isn’t whether we’re still mining—it’s whether we’re intelligent enough to own the mines instead of just swinging the pickaxes.

An Absolutely "Golden Opportunity".

Forex Kong Got something to say?

Quietly……As “Hurricane Sandy” plots her assault on the Atlantic Coast of the United States – the dollar also plots its course for the 200 day moving average.

I´ve been watching patiently as the last winds of this “dollar rally” blow hard towards (the now flat) 200 day moving average….and now….only a few short gusts away  – the storm has arrived!

Coupled with the recently announced “QE to Infinity” – one would have to assume this to be “certain death” to the dollar – and an absolute “Golden Opportunity” – to not only get short the buck – but to buy gold (and related stocks if that’s your thing) hand over fist!

I will be buying gold here (likely through the miners).

I will begin building several positions “short the U.S buck” as well Yen – against a basket of several currencies….as I look to  “RISK ON”  taking hold  in coming days.

The Perfect Storm: Dollar Breakdown Sets the Stage for Currency Carnage

The technical picture couldn’t be clearer – we’re witnessing a textbook breakdown that’s about to unleash massive volatility across the forex landscape. When the dollar crashes through that 200-day moving average, it’s not just another support level giving way. This is the moment when algorithmic trading systems, institutional money managers, and sovereign wealth funds all receive the same signal simultaneously: the multi-month dollar rally is officially dead.

What makes this setup particularly explosive is the confluence of factors aligning against the greenback. The Federal Reserve’s commitment to unlimited quantitative easing has essentially turned the printing presses into a fire hose of liquidity. Meanwhile, global central banks are coordinating their efforts to flood markets with cheap money, creating the perfect environment for a massive “risk on” surge that will leave conservative dollar holders in the dust.

Currency Pairs Primed for Explosive Moves

The EUR/USD is my primary vehicle for capitalizing on dollar weakness. With the pair sitting just above the 1.3000 psychological level, a decisive break above 1.3100 will trigger stop-loss orders and momentum algorithms, potentially driving price action toward the 1.3500 resistance zone within weeks. The European Central Bank’s recent dovish stance actually works in our favor here – it’s already priced in, while dollar weakness remains the dominant narrative.

Don’t overlook the commodity currencies in this environment. AUD/USD and NZD/USD are coiled springs waiting to explode higher as risk appetite returns and carry trades come roaring back. The Australian dollar particularly benefits from this setup, as Chinese stimulus measures combine with Federal Reserve liquidity to create the perfect storm for commodity demand. I’m targeting AUD/USD moves above 1.0500 as confirmation that the reflation trade is gaining serious momentum.

The GBP/USD presents another compelling opportunity, especially with the pair’s tendency to amplify dollar moves. A break above 1.6200 opens the door to a run toward 1.6500, particularly as the Bank of England’s monetary policy remains relatively restrained compared to the Fed’s all-out assault on the dollar’s purchasing power.

Gold Miners: Leveraged Plays on Monetary Madness

While physical gold provides solid exposure to dollar debasement, the real money lies in the mining stocks. These companies offer leveraged exposure to gold prices while trading at historically attractive valuations. The major miners have been beaten down for months, creating a situation where even modest gold price appreciation translates into explosive equity gains.

The key is selecting miners with strong balance sheets and low-cost production profiles. Companies operating in politically stable jurisdictions with all-in sustaining costs below $1,200 per ounce are positioned to generate massive cash flows as gold breaks above $1,800. The beauty of this trade is the asymmetric risk-reward profile – limited downside given current valuations, unlimited upside as monetary debasement accelerates.

Junior miners offer even more explosive potential for aggressive traders willing to accept higher volatility. These companies often move 3-5 times faster than gold itself, turning modest precious metals rallies into triple-digit percentage gains for shareholders. The trick is getting positioned before the institutional money recognizes the opportunity.

Yen Weakness: The Carry Trade Renaissance

The Japanese yen’s role in this unfolding drama cannot be overstated. As the Bank of Japan maintains its ultra-accommodative stance while global risk appetite returns, the yen becomes the funding currency of choice for international carry trades. This creates a self-reinforcing cycle where yen weakness fuels more carry trades, which in turn generates additional yen selling pressure.

USD/JPY is already showing signs of breaking out above key resistance levels, and a sustained move above 125.00 would signal that the carry trade renaissance is officially underway. More importantly, cross-currency pairs like EUR/JPY and GBP/JPY offer even more attractive risk-reward profiles, as they benefit from both yen weakness and dollar deterioration simultaneously.

Risk Management in a Volatile Environment

This setup offers tremendous profit potential, but it also requires disciplined risk management. The key is building positions gradually rather than betting the farm on any single trade. Scale into short dollar positions as technical levels break, using tight stop-losses to limit downside while allowing winners to run.

Position sizing becomes critical in this environment. Leverage should be used judiciously, particularly in currency pairs known for explosive volatility. The goal is staying power – maintaining positions through inevitable pullbacks while capturing the major directional moves that define generational trading opportunities.