There is no harm from using the XAUUSD chart to gauge likely events whether bear or bull justifications. If you for instance overlay your gold chart against some of the strongest stocks in the sector then why are some in a definitely bullish trend while the XAUUSD was dropping for the last 2 years? No doubt a big sell off in XAUUSD will have an immediate impact across the gold sector BUT the strongest one always have a better recovery than the weaker peers. This is not rocket science and if you catch the right gold swing then the weakest ones will usually make you more multiple baggers.
We each have our own objectives and personally mine is all about capital preservation and not chasing capital gains looking for that exponential rise as you can see from yesterday's fallen angels. There is nothing wrong with ANY approach as long as the investor is focus at not losing money rather than just think the amount of money they can make.
This opens up another debate of whether a concentrated exposure is better than a diversified. No right or wrong approach. Those concentrated will argue that if you don't bet all in then you are not skillful enough to make real money as opposed to a diversified portfolio stressing that they don't know where price will go to. Look around you in the billionaire space and the answers are even muddier. Soros/Druckmiller claims they are all in whatever and they are billionaire. Icahn sold out of APPL but Buffet bought APPL and price rising again. Who is right or wrong? Then answer who cares. They answer should be who is profiting. Ed Sekota has a famous expression, "Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money."
https://en.wikiquote.org/wiki/Ed_Seykota
