Gold’s December Dilemma: Seasonal Rally or Further Decline?
Updated
XAUUSD Multi-Timeframe AnalysisCurrent Price: 2650.350
Executive Summary:
Gold experienced a significant drop on Monday, November 25, after reaching $2,721, driven by easing geopolitical tensions and strong resistance. The price then fell to $2,605 and has since been consolidating within a bearish flag pattern. Currently, gold is trading at $2,650, showing mixed sentiment with short-term bearish potential and long-term bullish prospects.
Technical Analysis:
Bearish Flag (Short-Term Bearish)
The bearish flag pattern suggests potential downside, signalling a continuation of the recent correction. While it’s possible that the price could rise to the strong pivot resistance at $2,695, which aligns with the upper boundary of the falling wedge, rejection from this level could result in a breakdown from the flag pattern. Alternatively, the price may fail to reach $2,695 and break below the flag.
Key Levels to Watch:
First Target: $2,617 (strong pivot and support).
Next Target: $2,578 (ultimate support).
Gap Fill: If $2,578 breaks, the price could decline to $2,565 (filling the gap from November 18).
Psychological Level: A further drop could test $2,500, which coincides with the lower boundary of the falling wedge and serves as strong structural support.
Falling Wedge: (Long-Term Bullish)
In the long term, the falling wedge pattern suggests a bullish reversal. We expect the price to rebound from support levels near $2,565 or $2,500, resuming its bullish cycle. Gold could potentially rally to new all-time highs (ATH) during December, driven by seasonal demand and technical breakout momentum.
Seasonality:
Gold historically rallies in December, driven by holiday demand, portfolio rebalancing, and year-end events. Significant price increases were observed in December 2022 and 2023, and similar trends could support bullish momentum this year, barring any unexpected bearish developments.
Final Note:
Gold’s short-term sentiment leans bearish, with the bearish flag pointing to potential downside. However, the falling wedge suggests a strong long-term bullish outlook. Watch for key levels like $2,695, $2,617, and $2,500 for potential opportunities. Remember to practice tight risk management.
Happy trading!
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Symmetrical Triangle:
The price is currently consolidating within a symmetrical triangle, reflecting indecision and reduced volatility. This pattern signals that a breakout is imminent, which could go in either direction. A confirmed breakout above the triangle’s resistance could drive bullish momentum, targeting the Strong Pivot Resistance at 2,695.31. Conversely, a breakdown below the triangle’s support could push the price lower, toward 2,620 and potentially 2,617.25.
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How many pips have we gained from this analysis so far?
From the Flag and Symmetrical Triangle patterns, we have achieved a total of 4,914.6 pips.
Trade closed manually
We achieved an impressive 4,914.6 pips from this analysis! The trade was closed as we anticipated a potential shift in the market’s direction. A new analysis has been published—don’t miss any updates!
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