RLinda ! GOLD-> Gold forms an upward channel on the 1W Timeframe

9 sty 2023

Gold, tentatively, is forming an upward price channel on the global weekly chart, which is aiming toward $2000-$2100. Gold prices rose Monday and held near a seven-month high, supported by a weaker dollar and hopes that the Federal Reserve might slow the pace of interest rate hikes.

• U.S. output fell in December for the first time in more than 2-1/2 years amid weakening demand, further evidence of weakening inflation.
  
• Higher interest rates make gold less attractive as an inflation hedge and raise the opportunity cost of holding non-revenue-producing bullion.
  
• Retail purchases of gold in major Asian centers were slow amid rising prices early last week, while China, a major consumer, saw demand rise amid a resumption of work and the approaching Lunar New Year holiday.
  

Softer U.S. data on Friday boosted gold's appeal. The data suggests that the Fed's cumulative tightening in 2022 is starting to affect the economy, and that the Fed can afford to slow the pace of tightening

The yield on the 2-year UST fell sharply after the release of the Business Activity Index data. Gold is closely tied to short-term U.S. bond yields: any rise in yields causes the gold price to fall and vice versa.

As expectations of a U.S. rate hike decrease - the probability of a 25 basis point hike at the February meeting is now 76% - markets are questioning the credibility of the Fed.

CPI data this week will be key. Another slowdown in price pressures could boost appetite for gold, while the dollar will remain under pressure. However, an unexpected rise in CPI could undermine sentiment

The latest U.S. jobs report showed more job creation than expected, but hourly earnings data showed a slowdown in wage growth, something the Fed was sure to pay attention to.

The Fed also turned its attention to the latest U.S. ISM non-manufacturing sector data, which was a wake-up call as the index unexpectedly returned to contraction territory in December. This is the first decline in the U.S. services sector since May 2020, when the global economy was covid


In terms of technical analysis, on the main chart, I pointed out key elements such as

• A rising price channel
  
• Downtrending price channel (from which the price recently exited)
  
• Trade range 1680-2075
  

The bulls brought the price to a strong resistance level of 1878, but at the same time the volume profile considers this area to be empty. At the same time, at the 1878 level, I noted 10 confirmations of this zone and price reaction to the resistance.

The expected reaction is a pullback to the upward channel support, confirmation of the support line and continuation of growth in the medium and long term.

The next scenario - calm price growth to 1900, rollback to 1878, fixation of the price in the long zone and continuation of growth in the uptrend channel


Regards R. Linda!

9 sty 2023

Uwaga

+1060 points on gold since November for 4 published forecasts

9 sty 2023

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