Gold within tight range but still under Selling domination

23 set 2022

Gold's general commentary: The Price of Gold firstly started yesterday's session in Bearish fashion, then increased in value (# -0.10%) and instantly tested Upper levels with Bond Yields on Annual High’s as a catalyst. The DX, calculated by factoring in the exchange rates of six major World currencies failed to maintain this week’s upside momentum and now should marginally close the session in red. In addition to this, the U.S. Treasury #10-Year Yield note (Bonds Yield) crossed above (# +3.270). Both tend to be inversely correlated with Gold and that is Short-term reason of Gold’s constant Bullish spikes.


Technical analysis: The Technical outlook on the Weekly chart for Gold, after clearing its #2020 Yearly opening, displays a reasonably clear run towards the #1,600.80 psychological mark, aswell as nearby Support seen Trading at #1,652.80. Daily chart turned fully Bearish with RSI again near critical levels. My estimations regarding the Price-action on the Hourly 4 chart has the candles crossing values with Bearish contact point #20 points below the Resistance zone, which means that Gold is on it’s final try to break the Resistance, if rejected I will treat this as an Technical Top. What is worth mentioning is that the Price-action also correlates perfectly with Bond Yields and is compressing within an mini former Ascending Channel (Low: #2.700, High: #3.800”). What’s also notable from a Technical perspective on Gold is the RSI indicator (Daily chart), see displaying a divergence but far from Oversold reading which gives strength for Gold to finally break the Support on much expected Technical move. While the threat of further Buying on the Short-term is still there, I am not interested in Buying the market yet (unless #1,682.80 breaks and market closes the session above). A decisive Hourly 4 chart’s close below #1,682.80 (entry / Risk levels can be decided according to this breakout candle if the Trader wishes and variance allows), opens up new Bearish scenario regarding Short-term and announces new Support test.


Fundamental analysis: Following Bearish Short-term (Rate hikes in the foreseeable future) outlook from the Fed’s aftermath, trend should be even more Bearish if the DX keeps rising along with the Bond Yields near Higher High’s Upper extension which is adding to a very mixed picture on Gold (but Bearish underlying trend). Price-action is attempting to find balance between the two factors and has found itself consolidating again around the #1,670’s Resistance zone on current Neutral Hourly 4 chart’s setting. This is similar to the September #9 - #14 consolidation on the Hourly 4 chart with the rough neckline then being #1,937.80 - #1,951.80 (excluding the abnormal event on the #10), until one of the lines got invalidated and Gold revealed the major underlying trend (which should turn Bearish any minutes). The Daily chart’s Support is showcasing strong durability and is ready to postpone / limit the downtrend, Trading on #1,652.80 variance which is rejecting every current downside attempt. I won’t make any moves until I have a clear confirmation. Gold can go as far as #1,682.80 Resistance break pushes it so I will not try to Sell too early the current recovery. If #1,692.80 breaks before any of the above happens, I have a Bullish breakout signal however I am confident that Gold can’t keep current High’s for too long again on the Short-term (remains Bearish on the Medium-term, in resemblance of the last rally / where Gold was on serious decline), which is a Bearish development for Gold regarding #1-Week horizon. This downtrend is directly related to the constant High’s on DX but even then the uptrend on Gold was not so strong, counterbalanced by Bond Yields above the Resistance zone. It seems that Investors who Bought Gold during Pricing the current #1,652.80 Bottom, closed their positions whenever they heard of Fed news. Theoretically it makes Investors take capital off from safe-havens such as Gold and place it into riskier assets.


My position: My yesterday's session Selling order hit the #11 point Stop-loss (currently on #37 Profits row and #7 Stop-loss hits regarding April - September cycle), I have remained on sidelines awaiting another chance to re-Sell Gold regarding the Short-term. I have engaged new Selling order (#1,672.80 as an entry point), Targeting #1,652.80 psychological mark. Since my order is in decent Profit, I will move my Stop-loss on breakeven and practically have risk-free Trade on my hands. Gold is under total Selling domination and use every chance to Sell every Top / rise that Gold delivers.