Gold has consolidated for more than two years, and now it may be inching toward a breakout.
The first pattern on today’s weekly chart is the rally in October between roughly $1,812 and $2,000. That move broke a falling trendline from the summer when bond yields were climbing.
XAUUSD then pulled back to bounce above the trendline, turning old resistance into new support. Also notice how it retraced slightly less than 50 percent of the rally. That may indicate that a new bullish move is starting.
Next consider how this month’s low seems to represent a higher low versus October. Higher lows can also signal the start of an uptrend. (Higher highs occurred when the trendline broke.)
It’s additionally noteworthy that 2023’s troughs were slightly above long-term peaks from October 2012. That could be another case of old resistance becoming new support.
Finally, XAUUSD’s movement resembles the price action in the euro against the U.S. dollar. (They have a strong historical correlation, with bullion often benefiting from dollar weakness.) Both have gained as lower inflation makes investors think the Federal Reserve will stop hiking interest rates and potentially lower them next year.
That belief could spur price movement into big macro events like PCE inflation on Thursday and non-farm payrolls on December 8. Even bigger catalysts may be the consumer price index (CPI) on December 12 and the next Fed meeting on December 13.
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TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.
The first pattern on today’s weekly chart is the rally in October between roughly $1,812 and $2,000. That move broke a falling trendline from the summer when bond yields were climbing.
XAUUSD then pulled back to bounce above the trendline, turning old resistance into new support. Also notice how it retraced slightly less than 50 percent of the rally. That may indicate that a new bullish move is starting.
Next consider how this month’s low seems to represent a higher low versus October. Higher lows can also signal the start of an uptrend. (Higher highs occurred when the trendline broke.)
It’s additionally noteworthy that 2023’s troughs were slightly above long-term peaks from October 2012. That could be another case of old resistance becoming new support.
Finally, XAUUSD’s movement resembles the price action in the euro against the U.S. dollar. (They have a strong historical correlation, with bullion often benefiting from dollar weakness.) Both have gained as lower inflation makes investors think the Federal Reserve will stop hiking interest rates and potentially lower them next year.
That belief could spur price movement into big macro events like PCE inflation on Thursday and non-farm payrolls on December 8. Even bigger catalysts may be the consumer price index (CPI) on December 12 and the next Fed meeting on December 13.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.
