Where is Gold headed? We were left with this question in last week’s analysis(here). We had mentioned how the 1930$ and 1970$ were strong range areas, which the price could struggle to break. Decisive breaks would lead gold to take a stronger direction.
So where is the GOLD headed?
To date, can we say that we have finally reached a direction on GOLD? The answer, for me, is no. Gold still leaves us in doubt. The week just past was full of false signals and many traders got hurt. As we often say, we wait for closings before entering a position and do not try to anticipate the market.
As the image above shows us, the breaking of levels did not happen, or rather, it did not happen decisively. The Gold tried to break downward from the 1930$ areas by almost touching the psychological threshold of $1900, the last bastion for a descent to the month’s lows, but no dice. As we see from the image it was promptly bought back into the ellipse area. Many were fooled because, having not waited for the candle to close, they noticed a sharp drop in price and jumped in. Omelette made. After a few hours gold was back in range.
A bullish spike, then, featured Aug. 27 in conjunction with Fed Chairman Powell’s speech following his accommodative outing toward even above-target 2 percent inflation. Once again the chickens fell into the cage and the stop losses jumped. Looking at the last ellipse we notice how the price was characterized by upward spike and subsequent downward spike. It was enough to wait for the close of the H4 candle to see that there was no directionality.
So where is Gold headed? How do we stay now?
Gold closed in the upper range phase without breaking it, however. The Fed’s accommodative monetary policy could give us confirmation that gold is The ideal asset in case of inflation. Fertile ground for an ascent. My view remains the same as last week and the same as 2 months ago. Gold could go up. But you know, the market does not agree with anyone but itself. So we must always be ready to revise our ideas according to the “ideas” of the market and admit it without fear. The coming week will tell us a lot. I finally expect that gold may take a stronger direction, either upward or downward.
Have a great weekend and thanks for reading.