Gold began to climb from $1,800 amid the bank bankruptcy crisis due to aggressive policies and also due to the slowing down of interest rate increases and the end of the Federal Reserve's contractionary policies approaching, and the support of buyers quickly raised it to above $2,000. But in the $2,000 channel, by getting close to the historical gold ceiling, with a stop motion, it activated sell orders and stops above the historical ceiling, i.e., 2070, and started retracement, and in a sinusoidal movement, it reached $1,950 in a few weeks. On Friday, May 19, it closed at $1,977.
Further, we will review gold's technical, fundamental, and sentiment aspects.
As you can see, by entering the $2000 channel at three points 1, 2, and 3, gold faced a good price rejection causing divergence, meaning higher peaks were formed in the price chart, but there were no higher peaks in the RSI indicator, this shows the activity and power of sellers. After the sinusoidal movements of the price in the short-term ascending channel, sellers had more strength and were able to cross the ascending channel's bottom at 2000 and push gold down to the most important support in the 1960 to 1950 range. But this range has existed due to price supports in the past, and its interference with the 23% Fibonacci prevented gold from falling further with its supporting role.
It seems that gold will continue to fall again with an upward price break and a pullback near the 2000 channel, and after breaking and stabilizing below $1950 in the mid-term timeframe, it will also descend to the floor of the 1900 channel. Therefore, investors can be patient, and if they see bearish signs in the pullback to the $2000 channel, enter the sell trade with an appropriate stop. Note that the chart review in lower times gives a crystal clear situation of gold's short-term movements.
Gold buyers should be careful in re-attacking 1950 because the next attack to this range and stabilization below it can again increase the power of sellers and lead to a fall in gold.
After getting an overview of gold's daily chart in the four-hour time chart, we can see that after breaking the ascending channel, gold effortlessly reached its first support of 1980, then, with the lack of support from buyers and the failure of this support, it has reached the main support range, i.e., $1950.
The point that is noticeable in the four-hour chart is the chart's price action ranges, the support range is in blue, and the resistance range is in red. Gold first has to cross the resistance range of $1983 to climb, which used to be the support range. In the chart, it is clear that gold has risen for the first time since 1950, the 1983 range has prevented gold from increasing further as resistance. If gold stabilizes above 1985, it can complete its step towards $2000 and pull back to the broken trend line. The most significant gold supply area is between 2000 and 2010. You can sell with a suitable stop if you see signs of sell in the first and second resistance areas, such as candlestick patterns.
But for further decline, gold needs to stabilize under the support of $1,950. In this case, gold can fall to the $1,920 and $1,900 support.
As you can see, in the one-hour timeframe, gold has broken its downward trend, and there are signs of rising prices, such as powerful ascending candles and the inability to cross the 1950 support and create a double bottom. Gold will probably go towards the line with a little drop, and by receiving energy, it will cross the 1983 resistance and reach the $2000 range. Therefore, in the short term, we can hope for the rise of gold. The buyers' stop in the short term is below 1950.
The fundamental analysis of gold depends on the US dollar's state, if it is good, it can lead to gold loss. The US dollar is in good general condition due to the good economic data and the Federal Reserve members' aggressive remarks last week. Significant Core PCE index m/m (April) data (Prev: 0.3% | Fore: 0.3%), which is the most important news of this week's economic calendar, will be released on Friday at 12:30.
Pay attention to the negotiations for the US debt ceiling agreement matter in this week's and next week's fundamental analysis. If the negotiations are positive, stocks will rise as a risky asset, and gold will fall as a non-risky asset. Also, if they do not lead to a specific agreement, gold will ascend as a safe asset.
Read More: You can learn about the dollar's exact fundamental situation in the weekly fundamental analysis published on the website.
In the short timeframes, considering the price support and lack of agreement on the US debt ceiling, market sentiments are closer to buying with a stabilization stop below $1950. It is better to let the price grow first and pull back to the 2000 range if you intend to sell in the daily timeframe and enter into a sell trade according to your strategy and appropriate stop if you see selling signs. Or let the price stabilize below the important 1950 support, then by observing sell signs, enter a sell trade according to your strategy.