Following the CPI data release on Tuesday, the price of Gold dropped from its recent high at $2,000 all the way through to the $1980 region where it is currently sitting. As we anticipate what could be next for the yellow metal ahead of the Retails sales data release from the US. In the meantime...
XAUUSD: Fake breakout or new reality?
2023-12-05 • Updated
Gold price experienced a notable turnaround, gaining fresh bids after a $125 pullback from its recent peak. Federal Reserve Chair Jerome Powell's recent speech suggested a reluctance towards aggressive rate cuts, dampening speculations of immediate policy easing. Market sentiment leans towards the belief that the Fed has concluded its tightening cycle, with a growing likelihood of a rate cut by March 2024. A modest uptick in the US Dollar acts as a headwind, yet gold maintains a steady bullish tone amid concerns over a potential conflict in the Middle East. The ongoing global economic uncertainties and a shift to safer assets contribute to gold's upside, with upcoming economic data and the monthly jobs report anticipated to guide future trends.
XAUUSD - BEFORE & NOW
In my last article on GOLD (XAUUSD), I mentioned that the safe approach to consider before selling Gold would be a break below the trendline, where the retest of the trendline would serve as the entry. However, due to rumors of possible conflict and civil unrest across several quarters, it is evident that earlybird investors may have already begun stacking up Gold as a hedging strategy. By the way, price didn’t break the trendline support; at least not until recently.
XAUUSD - W1 Timeframe
XAUUSD on the weekly timeframe appears to have hit the trendline resistance on the weekly timeframe, leading to a rejection of the price action, and ultimately a bearish move. It is notable to me, however, that the recent high is an actual break of structure, not a mere fakeout. This said, I expect price to drop into the demand zone I have marked in order to regain its bullish momentum. The confluences at that ‘point-of-interest’ include;
- Bullish array of the moving averages;
- 50-period moving average support;
- Trendline support;
- 70% of the Fibonacci retracement; and
- A rally-base-rally demand zone.
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Gold prices, stable above $2,000 per ounce, commenced the week on an uptrend driven by a rallying US dollar and anticipation surrounding the upcoming Federal Reserve meeting. Analysts highlight that the market is keen on the Fed's signals for the coming months rather than immediate announcements.
Intraday Bullish Scenario: Consider buying above 2028.50 with TP1: 2033, TP2: 2036, and TP3: 3039 on extension. Intraday Bearish Scenario: Look for sales below 2024 with TP1: 2000, TP2: 2016, and upon breakout TP3: 2013.
Intraday and swing scenarios based on price action and volume profile.
Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...
Last week I gave a trade idea on XAUUSD with a target around the $2,020 price line. At the time of writing, XAUUSD already exceeded the target and I’m sure that would leave a lot of people wondering what to expect next. Below, I have presented my view of how I expect the price action to turn out in the meantime.