Gold soaring under Fundamental Buying pressure

Gold's general commentary: Gold kickstarted Buying sequence as I’ve been monitoring it throughout all U.S. session, with Fed developments pointing that Inflation may be easing which had strong impact on world’s economic affairs and added strong Selling pressure on DX, hence Buying on Gold. Gold soared (even though it should as it is well known safe-haven asset) however sequence didn’t affected at all my pre and post Fed minutes plan / model. Hourly 4 chart still reveals an healthy Ascending Channel but practically Gold has been Trading sideways on the big scale since since start of the Trading week (futures too) with local Top’s and Low’s being made roughly every #3 - #5 sessions so, to rule out Bullish reversal in continuation, I was awaiting for market closing on yesterday’s session to confirm the speculative downtrend. Below #1,700.80 break, the Low-risk High-return Trade is to Sell on spot as close to Support as possible and aim at least for the Hourly 4 chart’s Selling extension - near #1,662.80 - #1,672.80 once again, however if #1,722.80 mark gets invalidated and market closes above - the Price-action will most likely trigger Buyers and extend the sequence towards Higher Higher's Upper zone extension at #1,727.80 - #1,742.80, September's Resistance zone.


Fundamental analysis: Despite the fact that DX is in local High's break attempt from #3-session consecutive aggressive uptrend, Gold opened the E.U. session on Neutral fashion after Bond Yields retraced a bit, as Selling momentum was postponed and Gold Bought back steep losses on Weekly (#1W) basis. This is most likely speculative positioning ahead of this week’s High-impact Fundamental announcements (CPI). Besides light calendar for the session, CPI will be the critical factor for Gold regarding Monthly fractal as I expect aggressive decline to be postponed but surely not out of the question (#1,700.80 mark well Supporting the Buying sentiment) however if DX continues the recovery and Bond Yields recovers in the same manner, similar to the post-NFP numbers, Buying should be in continuation. As discussed, I expect Medium-term Sellers to arise since DX cannot Trade on such Low’s for much longer. At the moment Gold is outperforming DX indicating that I can spot Bearish bias mainly because #2 reasons: 1) Gold should be significantly Higher taking the circumstances in consideration, but isn’t and #2) deflating as the geopolitical tensions escalate and the capital that was parked on Gold should be relocated to riskier assets. Only firm bias which is adding credence to Gold’s Buyers is Inflation chart easing a bit which is having Bullish after-effect on Gold. I remain confident that the cyclical downside has potential to hit #1,588.80 in the coming #1 - #2 Months. Keep in mind that the Volatility will get Higher and Higher as market head towards CPI (where I expect Gold’s meltdown), so I won't be taking any excessive risks. I will re-Sell Gold only if #1,700.80 Support breaks (aggressive break).


Technical analysis: As discussed, since #109.800 Support got invalidated on DX, it was a Natural Buy-off reaction on Gold towards the #1,722.80 - #1,727.80 Resistance zone. I had these levels pointed out because current configuration had many similarities with last consolidation (January #8 - February #10) before Gold started it’s final Parabolic Leg towards March #8 Lower Low’s extension. I expect the demand from those #9-Month Support levels to align with the Fundamentals (Yields auction similar as on May #12 where government announced that there will be record output of Bonds of All times), need created out of huge unemployment number in U.S., visible on current NFP readings in general. On a different occasion, if #1,727.80 breaks, Gold's projected Medium-term Bearish cycle gets invalidated and Traders could seek the #1,752.80 mark Resistance of the Higher High’s Upper zone on Weekly chart (#1W). On the other hand, I am expecting an meltdown on the CPI aftermath, where my estimations shows that Bond Yields will Trade above (# +3.88%), as Gold should be seen Trading below #1,652.80 Higher Low’s extension by then as DX is reaching critically Oversold levels. Bullish continuation on Gold is both Technically, and Fundamentally quite unlikely to continue as DX is near a multi-Year Support level, that’s the sole reason why Gold was gaining strongly. I am expecting strong decline on Gold to cool down Overbought levels, sequence similar to August #8 High rejection (ultimate Top). What followed was an #3-Month decline slightly below the #1,778.80 Lower Low’s then (November #30 fractal). How DX fares into coming sessions is the key indicator where Gold will Trade next.


My position: Similar to yesterday's session, I will remain on sidelines, monitoring the Price-action from sidelines. It is dangerous to Trade Fundamentally driven sessions where side Swings can occur on Hourly basis. Most viable plan at the moment is to Trade the breakout.