Gold Analysis 16/03/2023
Updated
Gold's Technical Outlook: Second Bullish Flag Formation on the Hourly 4 Chart Suggests a Buying Opportunity
As a trader, I believe that a second bullish flag is forming on the hourly 4 chart's resistance cluster between #1,920.80 - #1,927.80. This could represent a technical buying signal, as bond yields are the main correlating asset, along with the inflation non-transitory and new banking collapse crisis. The next benchmark test is expected to be at #1,952.80, following the market close aftermath.
Despite the elevated volatility on all charts and the upcoming resistance zone on the hourly 4 chart, I advise against engaging in any selling orders due to the bullish bias. The daily chart indicates that after breaching the #1,920.80 - #1,927.80 resistance zone, the next technical stop should be #1,952.80. The January #30 bottom, which now represents a local top, was achieved under the second highest volumes in the last 14 months, making it difficult to speculate whether it will break.
Although I am a known gold seller, I advise against selling on such a bullish bias, as it is dangerous, especially without a tight risk/reward ratio. Instead, I suggest waiting for the next bullish leg upwards. I also note that the undesirable volatility due to the banking collapse crisis is putting gold as an asset in high demand.
My main correlations remain DX and yields, both of which are expected to go lower throughout the session. The current strong critically overbought levels are a product of fundamental pressure, a mix of constant volatility on yields related to non-transitory inflation and news related to current fundamentals, adding constant buying pressure on gold. However, I am not confident that both factors can spike up the price action all the way above the psychological barrier of #2,000.80.
In conclusion, while the current price action is far from fair technical price, I advise against selling due to the bullish bias and will continue to buy every dip that gold makes as long as the current state lasts. My first buying entry worked perfectly, and I will await the second one to be accomplished at the #1,920.80 pressure point to re-buy gold towards the #1,952.80 benchmark. However, I also note that the constantly changing supply-demand will interfere, and according to my estimations, there is more harm and risk in trading such sessions than benefits.
As a trader, I believe that a second bullish flag is forming on the hourly 4 chart's resistance cluster between #1,920.80 - #1,927.80. This could represent a technical buying signal, as bond yields are the main correlating asset, along with the inflation non-transitory and new banking collapse crisis. The next benchmark test is expected to be at #1,952.80, following the market close aftermath.
Despite the elevated volatility on all charts and the upcoming resistance zone on the hourly 4 chart, I advise against engaging in any selling orders due to the bullish bias. The daily chart indicates that after breaching the #1,920.80 - #1,927.80 resistance zone, the next technical stop should be #1,952.80. The January #30 bottom, which now represents a local top, was achieved under the second highest volumes in the last 14 months, making it difficult to speculate whether it will break.
Although I am a known gold seller, I advise against selling on such a bullish bias, as it is dangerous, especially without a tight risk/reward ratio. Instead, I suggest waiting for the next bullish leg upwards. I also note that the undesirable volatility due to the banking collapse crisis is putting gold as an asset in high demand.
My main correlations remain DX and yields, both of which are expected to go lower throughout the session. The current strong critically overbought levels are a product of fundamental pressure, a mix of constant volatility on yields related to non-transitory inflation and news related to current fundamentals, adding constant buying pressure on gold. However, I am not confident that both factors can spike up the price action all the way above the psychological barrier of #2,000.80.
In conclusion, while the current price action is far from fair technical price, I advise against selling due to the bullish bias and will continue to buy every dip that gold makes as long as the current state lasts. My first buying entry worked perfectly, and I will await the second one to be accomplished at the #1,920.80 pressure point to re-buy gold towards the #1,952.80 benchmark. However, I also note that the constantly changing supply-demand will interfere, and according to my estimations, there is more harm and risk in trading such sessions than benefits.
Note
As i mentioned in my analysis. Close Partial Trades and move your Stoploss to breakeven
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.