Gold Trading on upswing but recovery is strongly limited

24 Okt 2022

Gold's general commentary: Very interesting Technical fractal regarding Hourly 4 chart as Gold dipped almost #22 points (#3 consecutive sessions of losses on Gold), previously discussed on my remarks. That current downtrend should be in continuation, confirms the Daily chart’s configuration on Bond Yields, where Price-action almost broken the February #20, #2020 Year High (which has been holding for #5-straight Months), as on the aftermath, Gold (February #24 - March #19 fractal) engaged almost #200 point decline.


Technical analysis: My estimation shows that Gold’s fair Technical value should be around #1,600.80 mark already, with possibility of #1,588.80 test. However, many Long-term Buyers have multiple Buying pending orders and that’s why #1,615.80 - #1,622.80 represents very strong Support zone, practicing durability. As Gold always repeats it’s cycles, I am well known as an Medium-term Trader and as such, I am heavily on Bearish side regarding Medium-term as Selling sentiment remains firm regarding Medium and Long-term. Indeed Gold was Trading on my predicted values (within my model) and current Buying sequence didn’t came as an Technical surprise, as #4 out of #4 times Price-action is getting rejected near Support zone. With Daily chart’s Resistance zone invalidated, Gold is pricing a Top here, temporary or not and regarding the Short-term recovery, this should be the maximum of Intra-day Buying sequence. I expect configuration to escalate as Gold should deliver #1,633.80 test once again within #2 sessions if #1,642.80 is tested and invalidated Intra-day throughout today's session. Gold got rejected near the #1,662.80 fractal so the Short-term direction remains Bearish and the Price-action is yet again headed towards the Hourly 4 chart’s (newly forming Descending Channel’s Upper zone) for Support test. If broken, the Short-term trend shifts from Neutral to Bearish too and can escalate then as Low as #1,615.80 (#2-Year Bottom / September #28 sequence) and even #1,600.80 mark in extension within a few sessions (late Trading week). The trend will resume the Bullish bias only if #1,662.80 and #1,672.80 benchmarks break.


Fundamental analysis: Following today’s session spread divergence on Gold’s Spot-prices (Xau-Usd) and Gold Futures are attempting a balance and they are pretty close at the moment which indicates that Gold should be Trading according the Technical rules. My focus is on Spot-prices as always which were Trading on Buying pressure throughout last week but engaged the Short-term correction as today's U.S. session opening Bell approaches. With that being said, it becomes obvious that Technically, mini Buying leg is over with the multiple Top’s on Hourly 4 chart, as I am expecting Hourly 4 chart’s #1,622.80 test, as an obvious Target if of course Support belt is invalidated and Gold prices in full candle below it. It is my belief though that the extension can be as Low as the #1,615.80 on Medium-term. The Daily chart remains Bearish but mixed DX is not reacting as positively as one would expect to the passing of the Fed's news and renewed hawkish stance. Taking all aspects into consideration, I am expecting this week’s Bearish sequence to continue only when Sell-off below #1,642.80 happens as today’s U.S. session approaches, however Yields Sold back last week’s peak which is not going in my favor. I am expecting Gold to re-test levels close to #1,620’s within #3 sessions.


My position: Even though my current Trading results are excellent and I can afford the risk, I am heavily on Selling side however it is still early for me to engage my piercing Selling order. I will only re-Sell Gold if #1,642.80 breaks, Targeting #1,622.80 Support sequence. I am very comfortable with waiting.