Gold At Short-Term Resistance. Now what?

Gold could not care less for the developing situation with the Greek debt. It has its own way and its own behavior that has nothing to do with EU meetings, creditors or countries' defaults.

The yellow metal is strictly following the downward trend and earlier today hit the resistance line and reached its peak at $1,166.48 only to retreat a bit lower currently trading at $1,162-$1,163/oz. It is worthwhile to keep watching price's behavior and see whether it is going to break resistance, as this is only H1 chart. Odds are stacked on further price lowering due to lack of major news except the Greek debt crisis, but the impact on Monday could not be felt and did not make a difference which caused traders and investors to quickly lose interest.

Chart: H1 XAUUSD

Paul Tudor Jones' Wisdom

Paul Tudor Jones is among the greatest traders in the history of trading. The master trader called the 1987 crash perfectly, relying on the similarity in the technical analysis between a previous crisis and the one that was about to happen. On that day he shorted the market reportedly netting $100 million, thus making this trade one of the greatest of all time.

Here are his 15 best pearls of investment insight.

"The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge."

"Intellectual capital will always trump financial capital."

"The concept of paying one-hundred-and-something times earnings for any company for me is just anathema. Having said that, at the end of the day, your job is to buy what goes up and to sell what goes down so really who gives a damn about PE's?" (P/E is price to earnings ratio.)

"Every day I assume every position I have is wrong."

"Losers average losers."

"There is no training, classroom or otherwise, that can prepare for trading the last third of a move, whether it's the end of a bull market or the end of a bear market."

“You adapt, evolve, compete or die.”

"Trading is very competitive and you have to be able to handle getting your butt kicked."

"If trading is like chess, then macro is like three-dimensional chess."

“The whole world is simply nothing more than a flow chart for capital.”

"Failure was a key element to my life’s journey."

"Where you want to be is always in control, never wishing, always trading, and always, first and foremost protecting your butt."

“After a while size means nothing. It gets back to whether you’re making 100% rate of return on $10,000 or $100 million dollars. It doesn’t make any difference.”

"I believe the very best money is made at the market turns. Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms."

"At the end of the day, the most important thing is how good are you at risk control."

Gold Bears in Charge

Today's session marked the lowest level of Gold's price since March 18 just briefly touching the $1,147 mark. Gold is currently trading at around $1,1150-$1,1154/oz.

H1 Chart shows that those levels are short-term support for the yellow metal, thus hinting a potential move to the upside with resistance at around $1,162-$1,167.

Bearish channel is still intact and going strong.

Chart: XAUUSD H1

Monday Wisdom

If you have to remember something for today, remember this: 

"The expectation of an event creates a much deeper impression upon the exchange than the event itself. When large dividends or rich imports are expected, shares will rise in price, but if the expectation becomes a reality, the shares often fall; for the joy over the favourable development and the jubilation over a lucky chance have abated in the meantime". ~de la Vega 

Chart: H1, XAUUSD

Gold and Greece

With the latest developments around the Greece debt crisis, Gold has not seen much of a positive sentiment from traders and investors. The reason for that would be that the U.S. Dollar is considered the best option to protect your capital and the well-known "Gold-Safe-Haven" scenario is not playing very well. At least for the moment. 

Greece, the land of debt, with missed payment to the International Monetary Fund, with banks shut down and with no sign of a new financial aid, is likely to default on other debts again this month. Being so deep into unknown territory, Greece is to vote on a referendum on Sunday. 

If they vote "yes," it will mean more spending cuts, more tax hikes, and more rounds of tense negotiations with European creditors. But in the long run, it could lead to a more united Europe. If the Greeks vote "no," it will likely trigger Greek exit from the Eurozone. That would cause turmoil for the Greek economy in the short run, but could ultimately give Greece more control over its destiny.

But at least Greece has nice places and lots of sunshine so they have that going on for them. 

Now, what would be Gold's reaction to all of this? It is well-known how easily Gold catches fire. A probable Greek exit from the Eurozone could add as much as $200 to the price of Gold in just a few seconds. And this time it will not have any correlation to the U.S. Dollar. Gold will divert and yet again gain the so-needed trust of market participants. Will Gold shine again? Soon we will know. 

Any open positions left over the weekend could result in massive gains that won't let you sleep from excitement. But they could also turn against you so bad you will not be able to see straight.

Chart: H8 XAUUSD

Greece's PM Alexis Tsipras has confirmed that his country would hold a referendum on Sunday on terms of its bailout after Germany rejected a deal offered by the Greek government to its creditors. 

No talks would be held before the Sunday's vote as Berlin rejects any further discussion.

An event of world importance such as this could easily wreak havoc in financial markets. In light of this, ActivTrades is implementing a measure that would protect clients by substantially limiting their potential losses by temporarily increasing Margin Requirements probably by 4 times on July 3. 

If you have any open positions be considerate and wise. Although holding any open positions during such events might get you rich quickly, it might also take your shirt off your back. 

Moral Story Of The Day

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“THE GOOSE AND THE GOLDEN EGG” (AESOP)

“The Goose and the Golden Egg” is a fable authored by the legendary storyteller Aesop, who lived in ancient Greece ca. 620 –560 BC. Many details about Aesop’s origins are unknown, yet it is widely believed that he was a slave from Phrygia who came to live in Samos. The corpus of moralistic fables attributed to Aesop has been passed on throughout the centuries from antiquity to the present. Although the fables have had varied significance according to the contexts in which the tales were read, Aesop’s use of animal narrators and symbolic natural elements to subtly illustrate the ironies and lessons of the human condition have in many ways remained timeless.

“The Goose and the Golden Egg” tells of a man and his wife who had a goose that laid a single golden egg for them each day. As the man’s wealth grew, he became dissatisfied with only a single egg each day and wished for more. Assuming the goose was filled with gold inside, the man foolishly killed it. Upon finding that the goose bore no treasure inside of her, he remarked to himself, “While chasing after hopes of a treasure, I lost the profit I held in my hands!” (adapted from Gibbs 2002). The moral of the story is that those who are greedy and seek to obtain more than they deserve risk losing everything they have.

The phrase “killing the goose for the golden egg” has evolved as a widespread idiomatic expression used in reference to events or actions that produce an immediate desirable result with potentially disastrous long-term consequences and is particularly common as a proverbial reference to shortsighted economic policies within the realm of banking and finance.