Global Gold Analysis (XAUUSD)

A review of gold movements

Last week's analysis worked perfectly and beautifully. As mentioned, gold had approached the 1950 to 1960 resistance level, and there were reasons for the instability of gold's rise, and this metal needed to rest. Therefore, it started a descending reaction from the 1949.5 number. The first support mentioned in last week's analysis was between 1905 and 1900. We also mentioned that gold's descending reaction could turn into a retracement if confirmations of further decrease are issued. However, gold was supported and had another rise until 1960 and reached the mentioned resistance level and the specified corner ceiling again. Once more, gold could not be stable on the rise and made a descending reaction with a drop until 1910, the daily close below the daily trend line confirmed the retracement, and gold was corrected in 1861.

Further, we will review gold's technical, fundamental, and sentiment aspects.

Gold Technical analysis 

By reviewing gold's daily chart, as mentioned in last week's analysis, gold showed a descending reaction to the 1950 to 1960 resistance level and couldn't continue its rise, and with the daily candle close below its trend line, it issued a confirmation of a descending reaction to a retracement. And then, with a powerful candle, gold crossed its most important support, that is, 1900, and reached the 1860 level. (Note that the 1900 support was able to support gold several times and increase the price, but in the third attack, this support was no longer strong enough to increase the price.)

Gold's most important support, which can determine the mid-term movement of this precious metal, is in the 1830 to 1820 range. This support level interferes with 38% Fibonacci, which adds to the strength of this level's support role, and if gold reaches this range, it will lead to a good ascend reaction, but if it stabilizes below 1820, it will probably experience more descend movement.

However, gold's most important resistance is in the 1900 level, an area that previously had a supporting role, and now with its breakage, it can play a resistance role and cause a descending reaction of gold. This range will also determine gold's path in the daily timeframe. If gold stabilizes above this level, it can continue its upward movement again.

In the four-hour time frame, one can see gold's strong descending candles with the smallest price break on gold's price decrease path. Gold is currently involved in partial support, and it seems this support is temporary and more for the price break and to gain the necessary energy to continue the downward trend. Note that the price does not move in one direction and needs rest and price correction. We can also see that the RSI is oversold and needs to rest. Therefore, gold can reach its next support by breaking the 1860 support and stabilizing below it.

Gold fundamental analysis

Last week, the most important events were for the dollar and the symbols related to the USD, such as gold. On Wednesday, the central bank chairman's speech, which was a retreat from its aggressive policies, caused the dollar to weaken and gold to rise to the 1960 level. However, contrary to market expectations, on Friday, the US nonfarm report NFP, published the number of 517,000 jobs, which indicates the US labor market and the US economy's good state, and caused the dollar to strengthen and a sharp decline in gold. Fundamentally there is no important news this week, and it seems that the market will have more technical behavior.

Gold sentiment analysis

According to the mentioned reasons, this is not the end of gold's descending movement. Most likely, traders have ambushed to buy gold in lower ranges. If you are thinking of opening a long position in this area to gain profit from the price break, you can consider the 1860 breakage, as your stop, but the price from 1850 to 1830 can make good upward reactions and make a profit. So you can buy in the said key supports, with your strategy. If you are thinking of opening a short position, you should wait first and let the price increase, check the reaction to the 1900 level, and then enter a short position with a suitable stop in case of decline confirmations.