GOLD Finds Support at Key Fibonacci Level, Eyeing Further Gains
Updated
Gold gains traction and trades around $2,321 in the latter half of Thursday, buoyed by a drop in the benchmark 10-year US Treasury bond yield, which fell more than 1% on the day to below 4.3% following disappointing US economic data. This decline in bond yields provides support for XAU/USD.
The price action in gold demonstrated a strong rejection from a minor structural level, specifically at the 61.88% Fibonacci retracement level. This rejection was accompanied by a divergence on the H4 timeframe, indicating potential upward momentum as it moved into a demand area or support zone. Our analysis remains consistent with our previous outlook, maintaining a bullish bias and looking for a long setup.
From a technical standpoint, this divergence on the H4 timeframe suggests a potential reversal, aligning with our strategy to capitalize on the expected upward movement. The demand area around the 61.88% Fibonacci retracement level has proven to be a significant support zone, reinforcing our confidence in a bullish setup.
Moreover, the broader macroeconomic environment supports this bullish perspective on gold. The recent disappointing US economic data has dampened expectations for aggressive monetary tightening by the Federal Reserve. As a result, lower yields tend to make non-yielding assets like gold more attractive to investors. This dynamic is likely to persist in the near term, providing a favorable backdrop for gold prices.
Given these technical and fundamental factors, we are poised to take advantage of the anticipated upward movement in gold. Our strategy involves setting up long positions at current levels, targeting further gains as market conditions continue to evolve. This approach is reinforced by the technical signals observed on the H4 timeframe and the supportive macroeconomic backdrop.
In summary, gold's current price action, supported by a decline in US Treasury yields and strong technical indicators, presents a compelling case for a bullish setup. As we monitor the market for further developments, our focus remains on capitalizing on this anticipated upward trajectory, maintaining our long positions and adjusting our strategy as needed based on evolving market conditions.
The price action in gold demonstrated a strong rejection from a minor structural level, specifically at the 61.88% Fibonacci retracement level. This rejection was accompanied by a divergence on the H4 timeframe, indicating potential upward momentum as it moved into a demand area or support zone. Our analysis remains consistent with our previous outlook, maintaining a bullish bias and looking for a long setup.
From a technical standpoint, this divergence on the H4 timeframe suggests a potential reversal, aligning with our strategy to capitalize on the expected upward movement. The demand area around the 61.88% Fibonacci retracement level has proven to be a significant support zone, reinforcing our confidence in a bullish setup.
Moreover, the broader macroeconomic environment supports this bullish perspective on gold. The recent disappointing US economic data has dampened expectations for aggressive monetary tightening by the Federal Reserve. As a result, lower yields tend to make non-yielding assets like gold more attractive to investors. This dynamic is likely to persist in the near term, providing a favorable backdrop for gold prices.
Given these technical and fundamental factors, we are poised to take advantage of the anticipated upward movement in gold. Our strategy involves setting up long positions at current levels, targeting further gains as market conditions continue to evolve. This approach is reinforced by the technical signals observed on the H4 timeframe and the supportive macroeconomic backdrop.
In summary, gold's current price action, supported by a decline in US Treasury yields and strong technical indicators, presents a compelling case for a bullish setup. As we monitor the market for further developments, our focus remains on capitalizing on this anticipated upward trajectory, maintaining our long positions and adjusting our strategy as needed based on evolving market conditions.
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