Gold Retests Major Resistance Levels
The spot gold market surged overnight, targeting crucial resistance levels, but signs of rejection have surfaced as profit-taking and short selling emerge.
Weekly Candle Chart Analysis
A broader view on the weekly candle chart reveals a key area of resistance: the spike highs in August 2020, March 2022, and May 2023 converge at similar price points, forming a substantial resistance zone for gold.
In recent weeks, multiple factors have fuelled gold’s rally, including the anticipated conclusion of the Fed rate hike cycle, a weakening US dollar, heightened geopolitical tensions, and upcoming seasonal influences like Christmas, Chinese New Year, and wedding season in parts of Asia.
As gold retests this major resistance zone, a fierce battle between buyers and sellers is unfolding to determine whether gold’s recent rally will end.
Past performance is not a reliable indicator of future results
Daily Candle Chart Observations
Today’s closure on the daily candle chart holds pivotal importance. The price surge during the Asian session, followed by a retreat beneath the resistance zone, could confirm a bearish fakeout pattern if prices close in this manner.
Several indicators point towards a potential overbought scenario:
Harmonic Completion: Gold has completed a harmonic move from the October lows, with an initial rally (A-B), a subsequent retracement (B-C), and the recent spike (C-D) roughly equidistant to the A-B leg, signalling potential harmonic completion.
Keltner Channels: Today's spike breached the upper Keltner Channel for the first time since the late-October pullback, suggesting an extended move.
RSI: The Relative Strength Index (RSI) has crossed above 70, though bearish divergence signals have not yet emerged.
The confluence of these factors implies a critical juncture for this week’s price action in the gold market.
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Weekly Candle Chart Analysis
A broader view on the weekly candle chart reveals a key area of resistance: the spike highs in August 2020, March 2022, and May 2023 converge at similar price points, forming a substantial resistance zone for gold.
In recent weeks, multiple factors have fuelled gold’s rally, including the anticipated conclusion of the Fed rate hike cycle, a weakening US dollar, heightened geopolitical tensions, and upcoming seasonal influences like Christmas, Chinese New Year, and wedding season in parts of Asia.
As gold retests this major resistance zone, a fierce battle between buyers and sellers is unfolding to determine whether gold’s recent rally will end.
Past performance is not a reliable indicator of future results
Daily Candle Chart Observations
Today’s closure on the daily candle chart holds pivotal importance. The price surge during the Asian session, followed by a retreat beneath the resistance zone, could confirm a bearish fakeout pattern if prices close in this manner.
Several indicators point towards a potential overbought scenario:
Harmonic Completion: Gold has completed a harmonic move from the October lows, with an initial rally (A-B), a subsequent retracement (B-C), and the recent spike (C-D) roughly equidistant to the A-B leg, signalling potential harmonic completion.
Keltner Channels: Today's spike breached the upper Keltner Channel for the first time since the late-October pullback, suggesting an extended move.
RSI: The Relative Strength Index (RSI) has crossed above 70, though bearish divergence signals have not yet emerged.
The confluence of these factors implies a critical juncture for this week’s price action in the gold market.
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
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