Gold: Significant Signals Appearing Before Selling Spree Starts
2022.11.17 07:35
Examining since Sept. 28 when they hit a multi-month low at $1617.92, there is significant buying support at the level on Oct. 21 and Nov. 3 before they found a breakout above the stiff resistance at $1677.29, before heading to sustain above the second resistance at $1762.14 on Nov. 11.
Undoubtedly, gold is are struggling to sustain its price this week amid growing rumors about some of the big chunks of money that exited cryptocurrencies last week. The absence of any reliable data proves to be a setback for the gold bulls.
Gold bulls look to be waiting for the Fed to signal a potential slowing of rate hikes, but the Fed could remain hawkish while committing more views ahead.
On the other hand, changing geopolitical moves with discussions among the G20 and NATO members could tilt the price trend of the precious metal all of a sudden as the NATO allies wake up to Russian supremacy in the Arctic.
Technical Outlook
Weekly Chart
Gold Futures Weekly Chart
Despite a straight upward move during the last two weeks, futures have formed an ‘Exhaustive Candle’ and trying to defend the immediate support at $1762.14.
If gold closes this week below this significant support, exhaustion could continue to grow during the upcoming week.
Currently, gold bears look too aggressive to push futures to test the next significant support at 26 DMA, which is at $1750.25.
Undoubtedly, if gold finds a breakdown below the 26 DMA during the upcoming week, the slide could be steeper as the current exhaustion looks evident enough to push the Gold Futures to test $1617.
Daily Chart
Immediate resistance is at 200 DMA, currently at $1805.55.
Undoubtedly, any upward swing will attract big bears to go short as still the recessionary fear hovers around amid a steep surge in energy prices.
In case of a steep fall, immediate support can be at the 9 DMA, currently at $1729.45, and the next support will be at the upper end of the 26 DMA, currently at $1705.
Disclaimer: The author of this analysis does not have any position in gold futures. Readers are requested to create a position at their own risk.
