Short Physical Gold XAU And Go Long On Digital Gold BTC.
The physical gold price has been doing pretty well for most of 2019 but is it now time to take profit and invest into Bitcoin, aka digital gold? Let's use the latest XAUUSD chart analysis in order to establish a gold price prediction for the coming weeks.
Based on the chart above, my XAUUSD forecast has to be pretty bearish.
I am fully aware that we are practically in Q4 and this is the time of the year where most doomers and gloomers are expecting some type of stock market crash and dollar collapse. In those scenarios, the normal thing for the gold price would be to rise up dramatically.
But right now the gold price chart is telling a different story ( maybe due to the billion of dollars that the Federal Reserve is pumping into the stock market via the securities repurchase plan ).
We can clearly see that the formation of a bearish head and shoulder pattern on the daily gold price chart.
The neckline of the head and shoulder pattern is at $1480.
During its last bullish momentum, the gold price almost reached $1560.
Therefore the distance between the neckline and the top of the head is around $80.
As a result, if the neckline is broken and price start to move lower, the first logical target for the XAUUSD price will be $1400.
This gold price forecast is still above July's support area of $1380.
Once this target is reached, I will the have to re-assess the gold spot price action.
Many commodity traders and goldbugs went long on the yellow precious metal back in January when price was trading around $1280.
I am lucky to be one of them and it seems to me that now is a good time to cash out some of my profits and re-invest it into another type of gold, a digital gold.
BAKKT's physically settled bitcoin futures have started last week at a slow pace but trading volume are on the rise.
Institutional investors now have a fully regulated platform to buy bitcoin and if there was a black swan event on the stock markets, Bitcoin could well be the preferred safe haven over gold because it can provide much higher return on investment in a shorter time span. Indeed, the bitcoin halving is getting closer day by day ( next one will be in May 2020 ).
We have always seen the bitcoin price rising slowly but steadily before the halving and then the upwards move start to really accelerate after the event. Savvy investors are expecting the same cycle to repeat again and this is why many are switching from physical gold to digital gold. Personally, think BTC will provide a greater return on investment that XAU in the coming months and my bitcoin price prediction for 2020 is $60,000 ( this is my first BTC price target, the bitcoin price can move much higher ).
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