Gold - Fundamental and technical factors stay in gold's favor
Updated
Upcoming rate hikes, inflation and geopolitical tensions in regards to the situation in Ukraine keep positively impacting the price of gold. Yesterday XAUUSD peaked at 1914.32 USD, just slightly below the important resistance level at 1916.615 USD. We continue to be bullish on gold and we will watch whether it will manage to break above the resistance. Our short-term price target of 1925 USD and medium-term price target of 1950 USD stay in place.
Illustration 1.01
Picture above shows the daily chart of USOIL's RSI. It is observable that RSI stayed overbought for approximately a month. We expect a similar phenomenon to occur in gold.
Technical analysis - daily time frame
RSI reached an overbought condition which normally precedes correction in price. However, due to very bearish conditions in the general stock market we think RSI is likely to exhibit overbought condition for a while longer (similarly like in USOIL). This would imply a very strong bullish trend. MACD and Stochastic are bullish. DM+ and DM- are also bullish. ADX increases which suggests that the bullish trend is gaining momentum. Overall, the daily time frame shows first warning signs of overbought condition in the short-term. However, it still remains very bullish.
Illustration 1.02
Picture above shows the daily chart of gold's RSI. At the moment, it shows overbought condition.
Technical analysis - weekly time frame
RSI, MACD and Stochastic are all bullish. Same applies to DM+ and DM-. ADX exhibits growth which signals the bullish trend is gaining strength. Overall, the weekly time frame is very bullish.
Support and resistance
Short-term resistance is at 1916.615 USD. Resistance 1 lies at 1965.572 USD and the major resistance level can be found at 2075.282 USD. Short-term support is at 1877.14 USD and Support 1 at 1834.195 USD. Support 2 sits at 1750.74 USD. Major support level can be found at 1676.866 USD
Please feel free to express your own ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Your own due diligence is highly advised before entering trade.
Illustration 1.01
Picture above shows the daily chart of USOIL's RSI. It is observable that RSI stayed overbought for approximately a month. We expect a similar phenomenon to occur in gold.
Technical analysis - daily time frame
RSI reached an overbought condition which normally precedes correction in price. However, due to very bearish conditions in the general stock market we think RSI is likely to exhibit overbought condition for a while longer (similarly like in USOIL). This would imply a very strong bullish trend. MACD and Stochastic are bullish. DM+ and DM- are also bullish. ADX increases which suggests that the bullish trend is gaining momentum. Overall, the daily time frame shows first warning signs of overbought condition in the short-term. However, it still remains very bullish.
Illustration 1.02
Picture above shows the daily chart of gold's RSI. At the moment, it shows overbought condition.
Technical analysis - weekly time frame
RSI, MACD and Stochastic are all bullish. Same applies to DM+ and DM-. ADX exhibits growth which signals the bullish trend is gaining strength. Overall, the weekly time frame is very bullish.
Support and resistance
Short-term resistance is at 1916.615 USD. Resistance 1 lies at 1965.572 USD and the major resistance level can be found at 2075.282 USD. Short-term support is at 1877.14 USD and Support 1 at 1834.195 USD. Support 2 sits at 1750.74 USD. Major support level can be found at 1676.866 USD
Please feel free to express your own ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Your own due diligence is highly advised before entering trade.
Trade closed: target reached
Our short-term price target of 1925 USD has been reached. We change medium-term price target of 1950 USD to short-term.Trade closed: target reached
All our price targets have been reached.
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