Looking at the 4hr timeframe, one can see just how steep yesterday’s sell-off was! Both demand (now supply) at 1130.0-1133.6 and the swap support (now resistance) barrier at 1123.1 were taken out during this onslaught. This resulted in price hitting and rebounding from a Quasimodo taken from 1115.2. Economists believe that the recent losses seen on Gold are due to renewed concerns surrounding the Fed rate hike.
So, technically, we have the weekly chart indicating that longs are favorable, daily action portending that a further decline could be on the cards (see above) and 4hr action now closing in on swap at 1123.1. It is a tricky one for sure! For us personally, we’re not going to make any decisions until we see how price behaves at the 1123.1 region. A close above could suggest strength from weekly demand and indicate a long trade (on a confirmed retest of this number as support) is possible back up to swap supply coming in at 1130.0-1133.6. Meanwhile, a rejection of this barrier may allow us to short (with confirmation), as Gold may drive back down to Quasimodo support at 1115.2, followed closely by another Quasimodo support at 1110.9 (sits just above daily demand at 1098.6-1108.6).