Gold in a Wedge
Updated
I feel like all we ever do is talk about gold in a wedge. But here I am. . . As you can see are are still locked tightly in a wedge. And, we basically closed at the center of this wedge on Friday. Make not mistake, even within this wedge, the trend over the last couple of weeks has been bullish. However, as there are in any pattern, there is risk to the extremes of the pattern. In this case, downside to 2020 is possible, as is upside to 2062. VWAP from the 17th bottom has been a good area of dynamic support, and we've seen that, especially over the past week. The strategy will be to buy and sell the extremes so long as we maintain this wedge pattern. Trend traders will get frustrated here. Short-term cycle and mean reversion traders should enjoy this price action. On either an upside or downside break, look for gold to retest the wedge and continue for confirmation.
Note
We have reached the bottom of the wedge. Gold is probably going to need to retrace a bit. Two four hour Daddy Long Legs at the bottom here make me think we see some higher prices and a rebound to 2034.45 overnight. As I had said, by the extremes until confirmation of a break one way or the other. I Expect to see DXY come off a bit and that will help put a little bid into gold and put us back in this wedge. If I can buy small between 2020-2023.58 here in Asia, that would be ideal on a counter-trend long. Eventually, I will be looking sell the bigger bear fibs between 34-46 so long as there is resistance and supply there.
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