The past few weeks have been bearish on GOLD as it has been making lower lows after failing an attempt to an all time high.
But in my opinion, now could be a good time to long.
TA:
The downside move since 2070 $, wave (5) of , has been very consistent with it being a complex correction (WXY). A complex correction corrects in 3 waves, all of them being also 3 waves formations. This is why it is composed of 3 ABC.
What is also important to follow is the measurement of the waves. As you can see, the wave (Y) has the same length as wave (X) which is a very classical target for a 3 waves move when the middle leg doesn't reach a new high.
The last price action, wave C of (Y) which is labeled in more details on the chart, has been forming an ending diagonal which had bullish divergence in every new low since wave A of (Y).
This makes me quite confident that we should break this diagonal to end wave and start wave that will push us up to new all time highs.
FA:
Because of the recent fear in the market, prices have been falling down. The fear of investors is mainly due to the possibility of the FED to rise the interest rates with 75 bpm instead of 50. This has been priced in since the last FOMC meeting. But because of the recent lower CPI number of 8.3% (last month 8.5%), I believe that the FED won't rise the rates more than they intended to do. In other words, they will keep it to only rise the rates with 50% bpm. If they do so, then markets will reevaluate the prices and it would be seen as bullish because it will invalidate the fear of the FED loosing control over how much they need to rise the rates to control inflation. And of course, if they keep it to low interest rates, then inflation will remain high and investors will rather see their money into GOLD than into the DOLLAR (which I believe is topping on the DXY chart).
Trading Position:
If you want to take a long on this trade, I recommend a SL at the price of 1753 $ which is the start of wave . If this one breaks, then the count has to be reevaluated.
The target would be having the length of wave as 161.8% of wave (in log chart) that started at 1753 $ and ended at 2070 $.
But in my opinion, now could be a good time to long.
TA:
The downside move since 2070 $, wave (5) of , has been very consistent with it being a complex correction (WXY). A complex correction corrects in 3 waves, all of them being also 3 waves formations. This is why it is composed of 3 ABC.
What is also important to follow is the measurement of the waves. As you can see, the wave (Y) has the same length as wave (X) which is a very classical target for a 3 waves move when the middle leg doesn't reach a new high.
The last price action, wave C of (Y) which is labeled in more details on the chart, has been forming an ending diagonal which had bullish divergence in every new low since wave A of (Y).
This makes me quite confident that we should break this diagonal to end wave and start wave that will push us up to new all time highs.
FA:
Because of the recent fear in the market, prices have been falling down. The fear of investors is mainly due to the possibility of the FED to rise the interest rates with 75 bpm instead of 50. This has been priced in since the last FOMC meeting. But because of the recent lower CPI number of 8.3% (last month 8.5%), I believe that the FED won't rise the rates more than they intended to do. In other words, they will keep it to only rise the rates with 50% bpm. If they do so, then markets will reevaluate the prices and it would be seen as bullish because it will invalidate the fear of the FED loosing control over how much they need to rise the rates to control inflation. And of course, if they keep it to low interest rates, then inflation will remain high and investors will rather see their money into GOLD than into the DOLLAR (which I believe is topping on the DXY chart).
Trading Position:
If you want to take a long on this trade, I recommend a SL at the price of 1753 $ which is the start of wave . If this one breaks, then the count has to be reevaluated.
The target would be having the length of wave as 161.8% of wave (in log chart) that started at 1753 $ and ended at 2070 $.