Gold: Could Friday’s Reversal be Relied Upon?
2023.02.20 08:43
While I wrote an earlier , bulls were waiting for Fed’s meeting on Feb.1 amid bullish hopes for a breakout above $2,000.
I indicated an advent of exhaustion during the post-fed meet as the Federal Reserve could not overlook the growing .
Since then, gold futures continued a downtrend and hit a low at $1,927 last Friday before closing the week at $1,851. The prices have fallen more than 7% during this period after hitting a peak this month at $1,975 on Feb. 2.
Last Friday, buying was visible, despite the increasing fear of further as the U.S. equity indices regained some strength due to the flat .
Gold Daily Chart for April 2022
We can’t ignore the ethos of April 2022 when gold futures found a sharp reversal after testing a low at $1,816 on Apr. 16 and faced stiff resistance at $1,861 on Apr. 17 before the advent of a steep fall up to $1,830 on Apr. 20, and continued this slide till Jul. 21 when it tested a low of $1,877.
Technically speaking, in a daily chart, the price could retest this significant resistance once again if the upcoming week starts with a gap-up opening and could resume sell-off below Friday’s closing level as the rate-hike fear is still intact due to supportive economic data.
On the other hand, if they start the upcoming week with a gap-down opening and do not hold the immediate support at $1,830, gold could hit the next target at $1,785 as the 200 DMA is at $1,781 in the daily chart.
Disclaimer: The author of this analysis may or may not have any position in the Gold futures. Readers can take any long or short trading position at their own risk. Risk-taking in trading must be taken care of before creating any trading call.
