Gold on Medium-term critical crossroad / #1,600.80 next

31 Mac 2021

Gold's general commentary: Important Bond notes related developments for Gold as DX broke the #93.30 Hourly 4 Resistance and as expected, should cause Gold to decline even more on the aftermath, as an Hourly 4 Engulfing Bearish candle. The Higher High rejection on Bond notes throughout yesterday's session (# +0.50%) is Technically call for an mini recovery on Gold, as I believe that crossing the Resistance level on Bond notes was the necessary Selling confirmation for Gold. I spotted connection of Gold aswell (# -1.78%) to Usd-Jpy pair (# +0.51%) which leaves Usd-Jpy firmly in Gold’s correlations assets list. For the moment, I see only Bearish developments on Hourly 4 Gold chart, which shifted Gold from Neutral to Bearish (regarding Short-term). According to statistics, last #4 times Gold touched the Lower Low extension, resulted as an #15 point recovery, and another decline followed within #3 sessions, and if #1,675.80 breaks, I may see quiet Bearish session on the aftermath. It is Natural to expect a pullback, but as long as Bond notes are not pressured by disappointing numbers, I expect smooth diagonal correlation (Bond notes - Gold) Trading fueled by Inflation which will constantly impulse the Bond notes, and add strong Selling pressure on Gold later on. Strong Bid/Ask Volume usually reveals that strong movement session is ahead, and if Gold breaks the Support, it could easily engage Lower Low sequence and even deeper test of #1,675.80 ultimate Support zone (and break of wide Triple Bottom formation on Hourly 4 chart), break of which can extend the bigger proportion decline towards #1,588.80 (March #27, #2020. Year Bottom). Upper extension remains #1,700.80, as I doubt that Gold will pierce #1,800.80 psychological barrier (#100 points away) this Year. Especially since Daily chart is critically Bearish again.


Technical analysis: I will treat #1,700.80 as an Top and re-Sell area, with the next Technical stop on already discussed #1,675.80 variance, and break of that fractal can open doors for much deeper values, which I will be ready to pursue with my Selling orders. Regarding Medium-term, Gold is surely Bearish as the new #9-Month Low is on the cards, but on the other hand - I cannot rule out the strong correction (identical as on June #29) with #1,700.80 as an possible turning point. The Stock markets are still consolidating instead of rising on hopes of this better macroeconomic outlook. In essence the one works as counter to the other, hence Gold stays ranged still near the Bottom (even below) of the Bollinger Bands, visible on Daily chart configuration. This gives me the impression that Gold is more tied to the Bond notes index movements at the moment than any other asset, so I will Trade accordingly and take it into consideration. The slightest Bullish reversal on Bond notes should add Selling pressure on Gold. If #1,680.80 breaks, I will wait until it touches the Hourly 4 chart Support Trading at #1,675.80, contemplating Selling the market, and my Target will be #1,650.80. I am not interested in Buying, at least for #10 sessions more.