Gold, XAU / USD Talking Points:

  • Gold prices collapse today after settling into a bullish reversal formation as the October trade enters.
  • Buyers should remain cautious of the pursuit here as there have been a number of bullish moves in gold that have reversed lately.
  • The analysis contained in the article is based on Price action and graphic training. To learn more about price action or chart patterns, check out our DailyFX Education section.

Gold prices are skyrocketing today, hitting the psychological level of 1800. This comes as price action has integrated into an upcoming bullish reversal formation in October, showing a descending wedge after support held at a key location on the long-term chart. Falling corners are often approached for the purpose of bullish reversals and this continues to fill.

To learn more about falling corners, to verify DailyFX Education

Eight Hour Gold Price Chart

Graphic prepared by James stanley; Gold on Tradingview

Longer term, there is another bullish formation that even had recent background as a bullish flag remains on the charts at a larger scale and prices have crushed support at the top of the flag channel.

This fact is somewhat attenuated by the numerous false cuts which have already appeared on this flag; But with price action maintaining the 38.2% retracement of the 2018-2020 move, the door remains open to longer-term bullish scenarios that may align with the short-term bullish scenario discussed above. with the wedge formation falling.

To learn more about bull flags, to verify DailyFX Education

Weekly Gold Price Table

Weekly Gold Price Table

Graphic prepared by James stanley; Gold on Tradingview

Golden strategy: the challenge

Gold peaked on August 7e last year, setting up a bearish engulf on the daily chart just after that all-time high was set at 2075. Since then there have been numerous adjustments and restarts to the uptrend, each ending up falling to flat. There may have been a shift in investor behavior where some are placing their inflation hedges elsewhere, such as Bitcoin. It’s probably at least somewhat related to the fact that the crypto space has really come to life since that peak was set.

This does not necessarily mean pessimism for gold, but it should be borne in mind that although the weakness of the dollar reigned supreme in the fourth quarter of last year, gold prices remained very bearish. . Gold finally hit a low at the end of the first quarter, just as rates hit a new high in the United States, and with a rate cut in April and May, gold prices picked up. the offer for a test of the 1900 handle.

So, by inference, it appears that the most important factor driving gold up would be rate easing, which does not appear to be a strong achievable trend at the moment, given the aggressive rates of gold. ‘interest lately.

For Levels: Traders can follow tests of key resistance levels to get clues that buyers may become more and more aggressive. The first challenge would be a downtrend line connecting the June and September swing highs, and this is just around the psychological level of 1800. A little higher is a more relevant level at 1834, which has already reversed three bullish advances. different. And if that is removed, the 1900 level is in sight and a break from 1920, the previous record before last year’s explosion would reopen the door for another race at record highs.

Daily gold price chart

Daily gold price chart

Graphic prepared by James stanley; Gold on Tradingview

— Written by James stanley, Senior strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

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