Gold, the King is ready to abdicate and become Duke
Updated
Possible start of a massive sell-off regarding the king of metals.
Gold has reached for the third time the level of the absolute maximum, seen previously also in August 2020 and in March 2022.
Once arrived near this peak, during April of this year the candle to 1 month closed like a candle Doji (definable as a phase of indecision), the next is not yet closed permanently, although there are only 3 days left after the reopening of the markets.
The last candle is a definitely bearish candle, creating a notoriously bearish pattern known as "Evening star formation".
With the closure of this pattern you could prepare to pull the trigger for a short that could cover 35/40% of decrease, pruning the price up to the area between 1150 and 1300, almost halving the value from the maximum reached.
This level is assumed by the structure of the bullish trend on larger time-frames, the major trend in fact would be inviolate, still considered in a bullish phase in the long term.
At the same time it would create a correction that at the present time is missing from the period that goes from September 2018, considering then that from that moment we saw a rally that marked a 70% increase in the evaluation would be a plausible thing.
A second confluence for the indicated target is the insertion of a Fibonacci Retracement, with key values that correspond to the already mentioned area.
Gold has reached for the third time the level of the absolute maximum, seen previously also in August 2020 and in March 2022.
Once arrived near this peak, during April of this year the candle to 1 month closed like a candle Doji (definable as a phase of indecision), the next is not yet closed permanently, although there are only 3 days left after the reopening of the markets.
The last candle is a definitely bearish candle, creating a notoriously bearish pattern known as "Evening star formation".
With the closure of this pattern you could prepare to pull the trigger for a short that could cover 35/40% of decrease, pruning the price up to the area between 1150 and 1300, almost halving the value from the maximum reached.
This level is assumed by the structure of the bullish trend on larger time-frames, the major trend in fact would be inviolate, still considered in a bullish phase in the long term.
At the same time it would create a correction that at the present time is missing from the period that goes from September 2018, considering then that from that moment we saw a rally that marked a 70% increase in the evaluation would be a plausible thing.
A second confluence for the indicated target is the insertion of a Fibonacci Retracement, with key values that correspond to the already mentioned area.
Note
On the 1 Week chart you see how the trend changed in September 2022, giving the start to the wait for a good time to enter the market.Note
Always on the 1 Week chart you can clearly see a strong reaction to the zone of the maximum, closing with important shadows on candles (clear sign that as far as the balance in the market bears are taking over).Note
Looking then specifically at the last bullish drive (always keeping the same time interval on the graph), you can see that two attempts were made to score new highs, breaking the resistance zone represented by the area between 2070 and 2080.Both the first and second attempts failed, both maintaining a candle closure with important shadows.
Interesting though is the second attempt, as with its closure has created a pattern "Evening star" with relative confirmation.
Note
As mentioned above the second attempt is particularly interesting because the movement that allowed its formation created a support zone that is identified with the gray rectangle, which was firmly broken with the closing of the last weekly candle.The previous one, in fact, had closed with the body of the candle close, leaving room for doubt about what would have been the next trend: will the support hold and form the basis for a new bullish movement or will it not be strong enough and will it be exceeded?
This last candle that closed with the body permanently below is an additional incentive to pull the trigger for a bearish operation.
Note
Moving to a 1 Day chart you can clearly see the bullish structure first and the change, as made more immediate impact by the red arrow.Here we begin to see the rectangle of support that turns into a rectangle of resistance.
Note
On the graph at 4 Hours you see even better, but being a medium-term operation is preferable to monitor from longer time intervals.Note
Another factor to be evaluated is the reference currency, the US Dollar.Its index supports the analysis as the price is in a phase of strong uptrend and everything suggests that it will continue for a while.
Looking at the 1 Month chart you can immediately see that the price has had a phase of lateral consolidation from 2015 to 2021, breaking this phase in June 2022.
This break created an area of resistance first and then support, this is identifiable by the upper gray rectangle, the one where the price has just reacted.
Note
From the publication of the idea we see how the price has confirmed the break of the bullish trend, not scoring a new maximum, leaving instead the bears to the control.The price has now broken the level reached in March this year.
The movement recorded for now corresponds to 2.77%, bringing the new minimum below the level of 1900.
Note
Despite the continuation bearish we see that the price has not yet created a major correction, as seen in the other two cases.For this reason it is possible to expect the price to reach (more or less impulsively) the price range indicated by the red arrow.
Once you reach that area or a fairly interesting area you can expect the beginning of the real bearish movement on which the idea itself is based.
Note
In the previous two points we can clearly see the pattern that is expected in this third and last movement.Blue semilines are identified in the graph as breaks of the previous relevant structures, while the red arrow highlights the highlighted movements.
The last drawn arrow represents the probable development of the current situation.
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