Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Gold/USD Analysis (XAU/USD) – Gold prices break through key support levels. Has the downward journey towards 4400 begun?
The most important events on today’s economic agenda (United States – USD):
- Fed Funds Rate: Expected: 3.75% | Previous: 3.75%.
- Statement from the Federal Reserve Board of the United States.
- Federal Reserve Board Governors Press Conference.
Technical vision and expected scenarios:
Judging from the chart, gold prices are currently showing downward momentum after breaking through and holding the 4,600 mark. This comes after a period of sideways trading between 4600 – 4850 points; this suggests that there may be a balance between supply and demand forces until this breakout suggests that the outlook is likely to turn negative in the short term so far and if the selling momentum continues in the coming period of trading.
Several technical indicators support the same view, including trading stabilizing below the moving averages (20 and 50), which are starting to move lower and diverging between them. This suggests selling momentum so far. The relative strength index (RSI) curve has also continued to hold steady below the 50 level so far. This confirms the same negative view in the short term.
Based on this, here are the possible scenarios:
1. Negative Scenario:
Stabilization below the 4600 level may push gold prices to continue the decline to test the 4400 level. If it breaks and holds below, the price could extend towards 4100.
2. Scenario:
If gold manages to return to the uptrend and stabilize above 4,600, we may continue to trade sideways around 4,850.
3. Positive Scenario:
Return to the upside above 4600 and continue the rise, break and hold above 4850; perhaps this will turn the outlook to positive and we may see a target of higher levels around 4996 – 5000 points.
=====================================================================
Any opinions, news, research, analyses, prices or other information contained are general market commentary and do not constitute investment advice. ThinkMarkets disclaims all liability for any financial loss or damage (without limitation) or for any loss of profits arising directly or indirectly from the use of or reliance on such information.