ICmarkets

Interesting price action seen on our favorite yellow metal!

FX:XAUUSD   Gold Spot / U.S. Dollar
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Weekly Timeframe: Last week shows that Gold broke above a weekly supply area at 1296.3-1269.3, which as a result leaves the weekly supply area seen at 1391.9-1328.0 clearly in the limelight for the time being.

Daily Timeframe: The daily timeframe shows that after price broke above the weekly supply area mentioned above at 1296.3-1269.3 on Tuesday; hesitation was clearly seen in the Gold market. Price began consolidating between a small daily decision-point demand area at 1271.9-1281.3 (this was likely where pro money made the decision to break above the aforementioned weekly demand area), and a daily supply area above at 1319.2-1308.6. As long as the buyers can hold out above the daily decision-point demand area, we see very little reason why prices will not attack the aforementioned daily supply area this week sometime.

4hr Timeframe: For the best part of last week, the buyers and sellers were seen battling for position between a 4hr swap level seen above at 1305.2, and a 4hr swap level coming in just below at 1280.0.

Therefore, given all the points made above, where do we think Gold will trade next? Well, we currently have direction north on the weekly timeframe , meanwhile the daily timeframe shows that as long as the daily decision-point demand area holds, we can likely expect higher prices (for levels see above). Where does this leave the 4hr timeframe? As we already know, price is currently witnessing consolidative action (levels above), and as such we see tentative buy orders at 1281.7 (lower limit of the range), and likewise, tentative sells at 1303.7 (upper limit). We will personally not be trading the upper limit level here due to what the higher timeframes are telling us at the moment (see above).

For anyone considering trading this range, do remain vigilant to the fact that price could indeed fakeout here. A fakeout above 1305.2 would likely force the market towards a minor, yet very fresh 4hr supply area coming in at 1315.0-1311.2 (located within the daily supply area mentioned above at 1319.2-1308.6), and similarly, a fakeout below 1280.0 would likely see the market test a 4hr decision-point demand area at 1271.9-1277.1 (located within the daily decision-point demand area mentioned above at 1271.9-1281.3). As such, we would recommend not entering here blindly with a limit order and hoping for the best, waiting for lower-timeframe confirmation is (in our opinion) by far the best path to take.

Current buy/sell levels:

• Buy orders: 1281.7 (Predicative stop-loss orders seen at: 1270.9).

• Sell orders: 1303.7 (Predicative stop-loss orders seen at: 1380.9).


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