Gold - Quiet before the storm?
The price action of gold has been choppy for the past few weeks, and we are growing increasingly worried about its performance in the face of increasing interest rates later this month. Because of that, we remain bearish on XAUUSD in the short term. Further, we think if the stock market continues to manifest weakness, it will negatively affect gold. Indeed, we believe that market participants will sell their gold once again to cover losses elsewhere (just like on previous occasions). Due to that, we think gold might drift toward 1600 USD over time. Despite that, however, we are very bullish in the long term and believe that the selloff will present an excellent opportunity to add more gold to investors' portfolios.
Illustration 1.01
The daily chart of XAUUSD shows two moving averages: 20-day SMA and 50-day SMA. Two yellow arrows indicate bearish and bullish crossovers between these two SMAs. The third yellow arrow indicates the natural retracement of the price toward its SMAs. Therefore, we will pay close attention to the following price action; the breakout above SMAs will be bullish while the position below them is bearish.
Technical analysis - daily time frame
RSI and Stochastic are slightly bullish. MACD is relatively neutral; however, it will be bullish if it manages to break above 0 points. DM+ and DM- are bearish. Overall, the daily time frame is neutral.
Illustration 1.02
The weekly chart of XAUUSD shows two moving averages: 20-week SMA and 50-week SMA. They reflect the presence of the downtrend.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame is bearish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Illustration 1.01
The daily chart of XAUUSD shows two moving averages: 20-day SMA and 50-day SMA. Two yellow arrows indicate bearish and bullish crossovers between these two SMAs. The third yellow arrow indicates the natural retracement of the price toward its SMAs. Therefore, we will pay close attention to the following price action; the breakout above SMAs will be bullish while the position below them is bearish.
Technical analysis - daily time frame
RSI and Stochastic are slightly bullish. MACD is relatively neutral; however, it will be bullish if it manages to break above 0 points. DM+ and DM- are bearish. Overall, the daily time frame is neutral.
Illustration 1.02
The weekly chart of XAUUSD shows two moving averages: 20-week SMA and 50-week SMA. They reflect the presence of the downtrend.
Technical analysis - weekly time frame
RSI, MACD, Stochastic, DM+, and DM- are all bearish. Overall, the weekly time frame is bearish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
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