China’s “Golden Week” holiday is underway and gold markets there are closed for the week.

The demand vacuum created by this holiday often contributes to a gold price swoon, and that’s happening now.

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GDX swing trade chart

Swing trading is a great way to make money in a gold market correction. 

The booked trading profits also give investors confidence to add to core positions when overall investor sentiment and news is negative.

Note the big green support line on that GDX chart. If GDX trades down to the $24 area, long-term investors should place buy orders for GDX, GOAU, SIL and individual miners.

 “An environment of negative and lower-for-longer real rates, slowing growth with downside risks, and elevated uncertainty strengthens the case for holding strategic gold allocations.” – UBS bank analysts, Sep 30, 2019.

 The UBS team also notes that the current steady action in gold on rallies and declines is typical in a trending market. 

They just raised their 2020 target price to above $1700!

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daily gold chart

As a former stockbroker, I have a lot of experience dealing with investor emotion at key buy and sell zones in the market. 

Bank traders and Chindian gold dealers tend to be price makers more than takers, and that gives them the confidence to buy a falling knife and sell a parabolic move.

In my professional opinion, most amateur investors should not try to buy a falling knife, even at a major support zone.  

It’s simply too emotionally difficult to manage the investment professionally.

After a big decline in the gold market brings the price to a major support zone, amateur investors should wait for “signs of bullish life” before they buy.  

That could be an upturn in sentiment, a fresh rally with big volume, an important candlestick, or an oscillator buy signal.

These technical signs of life allow the average investor to make their purchases in a positive state of mind but still get their gold stock or bullion at a greatly discounted price.

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weekly gold chart

The key support zones for investors are $1466, $1385, and $1350.Gold is now near $1466.That’s a $100/ounce price sale from the $1566 area highs.

The next step is to watch for technical signs of life; gold investors don’t want to miss out on a rally to $1700, and that could occur soon if big bank analysts like UBS are correct!

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dollar versus yen chart

The dollar’s feeble breakout from the inverse H&S bottom pattern isn’t convincing, and a failure here would be a key sign of life that the gold price correction could be ending.

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Another major sign of life could come from this important “monthly close” gold chart.

Note the pullback to a key support line. If there’s even a modest rally from here, it could mean a bull flag is in play, and the target of the flag is about $1710!