Gold kept the Buying sentiment, as decline could be ahead

General outlook: Following yesterday’s session spread divergence on Gold’s Spot-prices (Xau-Usd) and Gold Futures are attempting a balance and they are pretty close at the moment which indicates that Gold should be Trading according the Technical rules. My focus is on Spot-prices as always which were flat on the Asian session but engaged the Short-term upswing as E.U. session approached. So it becomes obvious that Technically, Buying leg Technically could over with the multiple Top’s on Daily chart, as I am expecting Hourly 4 #MA50 test as an obvious Target. It is my belief though that the extension can be as Low as the #1,895.80 on Medium-term, if #1,927.80 Support is broken. The Daily chart remains Bullish but mixed and DX is not reacting as negatively as one would expect to the passing of the Stimulus bill. However, Bond notes are pulling back also after hitting their April #20th Resistance, so in my opinion, I am expecting this week’s Bullish sequence to continue only when Sell-off happens as U.S. session approaches. DX sold back last week’s peak as it is confirming Bullish outlook, which should add Buying pressure on Gold later on, when decline occurs. I am expecting Gold to re-test levels close to #1,895.80 within #3 sessions, if #1,952.80 Resistance remains preserved.


Technical analysis: The inability to get above the Higher High extension on the Daily chart along with the sharp fall on equities, are putting Gold (Xau-Usd numbers on my commentary) under pressure again. At the same time DX (again Trading on losses # -0.21%) has made a new Bottom below the #52 Week Low. Gold is on an interesting Technical fractal on the Hourly 4 chart. The dominant pattern is a clear Channel Up since December #30 Bottom. However since the December #28, the Hourly 4 RSI is ascending, being on Higher Highs, which is near pricing the Bearish divergence with the actual Spot Price-action which is on Lower High’s and Higher High’s. I have spotted the exact same sequence on July #8 - #16 fractal, where Gold was within Rectangle, engaged the aggressive decline, then started the recovery with more than #100 points. The RSI was then descending, while the Price-action made three Lower Lows on the bottom trend-line of the Channel Down, which Technically (if Gold repeat it’s cycle) could engage the decline and hit #1,895.80 pressure point, then #100 points recovery towards #2,000.80 psychological barrier. That suggests that Gold may be pricing a Top here (temporary or not) and using December #17 as an rejection point.


Bottom line and my position: I am still without a position since Price-action can guide the market both ways, but I still give more probabilities to the downside. Gold needs strong catalyst for further upswing, but yet Technically / Gold should deliver such needed aggressive correction towards lower levels such as #1,927.80 and #1,895.80 extension. I will Buy only if #1,952.80 level breaks, if not, I will be ready to pursue lower Targets.