2023-09-27 07:49

Global Gold Analysis (XAUUSD) (Will gold continue its downward trend)

Technical, fundamental, and sentimental analysis of global gold (XAUUSD) in Forex
Global Gold Analysis (XAUUSD) Global Gold Analysis (XAUUSD)

A Review of Gold Movements

In the previous analysis of gold, we pointed out that the strength of the sellers is still strong, the sellers had a $1900 target, and that's what happened. It is enough to repeat the daily analysis done in the previous analysis to review gold's movement:

"In this situation, professional traders say to sell at the ceiling and buy at the floor. Of course, you should pay attention to the fact that trades must-have stops, and you should be more careful in buying, because gold attacks support levels more than resistance, and there is a high possibility that the power of buyers has decreased in this support in the fourth attack. If you intend to sell in the daily timeframe, be patient until it gives a good high price, and you can sell with a suitable stop at the resistances, or let the price stabilize below 1930, then enter a sell at the bottom of the channel at 1900 in Pullback. Of course, all your trades must be per your strategy."

Also, in last week's analysis, we mentioned that the numbers 1900 & 1905 are good buy options, and the price also grew well from 1993, and the market closed at $1920 on Friday.

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

Gold Technical Analysis 

In gold's daily time frame, as you can see, gold has had a good decline by breaking and stabilizing under the $1930 support level. Also, when a support range breaks, it can act as a resistance range in technical analysis in pullbacks. As a result, gold reached below the 1900 channel with a pullback to the $1930 range. In this range, due to the 61.8% Fibonacci level interference, the diagonal line, and the $1900 round number, it followed the buyers' support by forming a doji candle, and the price made a good ascent.

Although gold is in a downward trend, in the chart and indicators, buyers' activity is gradually increasing in a daily timeframe. This activity can be seen from a strong bullish candle formation on Friday, the decrease in the volume of sellers in Macd, or the slight divergence formed in the last two valleys of the RSI.

In a daily timeframe, two ranges determine the rise or fall of gold. We need to see how gold reacts to the 1935 range to rise. If gold can stabilize above the 1935 range, more buyers can enter the market. The sellers can regain power, and gold will fall if the inability is seen. In the $1900 range and below, the activity of buyers should be considered, such as the formation of candlesticks that have an upward sign or divergence, etc., and if there is no support at $1900 and stabilization is done below the 1900 to 1890 range, gold can reach the next 1960 support. Buying can be a good option when the dollar arrives in this area.

The image below shows the gold chart in the daily time frame. Click on the chart photo to see it more accurately.

After receiving an overview of gold's daily chart, a descending channel can be drawn in gold in the 4-hour time frame. Gold must first cross the channel's middle line and then the $1930 resistance range to climb to the channel's ceiling. When the sellers' activities in these two areas become more evident, like a bearish candle formation, you can enter into a sell position with a stop according to strategy.

If you are thinking to buy, look for divergence at the bottom of the descending channel. In case of divergence and the formation of bullish signs, such as a bullish candlestick pattern, you can buy with a stop according to strategy.

You can use ower time frames for a more accurate check and a convenient entry point.

The image below shows the gold chart in the four-hour time frame. Click on the chart photo to see it more accurately.

Gold Fundamental Analysis

The fundamental analysis of gold depends on the US dollar's state. This week, significant employment data, including NFP, will be released for the dollar, and it's a busy economic calendar for the dollar.

On Friday at 12:30, the US Nonfarm employment report - NFP (Prev: 239k | Fore: 222k) and Unemployment rate (Prev: 3.7% | Fore: 3.6%) and Average Hourly Earnings m/m (Prev: 0.3% | Fore: 0.3%) will publish. At the moment of the news release, the focus is mostly on the NFP data, and the symbols related to the dollar will perform good fluctuations. But in general, analysts will examine the outcome of these three data together.

Federal Reserve policymakers recently realized some slack in the labor market. However, Powell noted in his speech that there are still about 1.7 job openings for every unemployed person in the United States, indicating an imbalance between labor supply and demand. The CME Group's FedWatch tool showed that markets will likely rise 0.25%. They increased the rate in July. Hence, investors will see if the employment data is good enough to allow another rate hike later in the year. Currently, there is about a 40% chance that the Fed will raise interest rates by a total of 0.5% before the end of the year. The market outlook suggests that if NFP rises more than expected, the dollar has more room to climb, resulting in gold falling. Stronger-than-expected employment growth could help the Fed convince investors of its willingness to raise interest rates to a range of 5.5%-5.75% from the current 5%-5.25%. On the other hand, a disappointing employment report, with an NFP release nearing 100,000, could revive expectations for less Fed contraction and weaken the dollar, sending gold higher.

We have reviewed the dollar's important news and situation in the economic calendar in the weekly fundamental analysis. Click to read the Dollar's fundamental analysis.

Note that at the time of the US NFP data release, symbols related to the dollar, including gold, will fluctuate greatly, so it is necessary to observe capital management.

Gold Sentiment Analysis

Since there is much significant news in the economic calendar this week, we expect a high fluctuation in the XAUUSD symbol, if the employment data shows a good situation during the week, we can enter sell trades. The first sell range is in the 1930 and The second range is between 1955 and 1960. You should be more careful about buying, and if the conditions mentioned in the analysis are created, the bottom of the 1900 and 1860 channels can also be a suitable option.

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