Cup and Handle Formation on Gold Monthly Chart
Hello Friends,
Many reasons which in confluence indicate that Gold has long rally to go from here (Current level 1871 USD/Ounce) as on 14 Feb 22.
1. Cup and Handle Formation on Gold Monthly Chart: Cup and Handle Pattern formation is visible on Gold's chart on Monthly time frame. Theoretically, it indicates targets of as high as Cup's depth, i.e. approx. 800 $ from here, i.e. 2600 - 2700 USD range.
2. Considering the up move that started in Oct 18 and lasted till Aug 20, Gold had shown Fibo retracement to 38.2% and bounced back from there twice. Thus, the level (1675 USD) is showing a decent support.
3. Flag Pattern: Above movement coincides with Flag Pattern, where the movement from Oct 18 to Aug 20 formed the pole and later channel formed the flag. On breakout of upper channel of flag, the targets that comes are height of flag pole. i.e. approx. 800 USD. This again coincides with 2600 - 2700 USD range target.
4. Geopolitical regime: Current rows between Russia and Ukraine may lead a shift in asset allocation from riskier to safe asset class, i.e. Gold.
5. RSI Indicators: Momentum of daily RSI had already crossed crucial 60 levels and weekly and monthly time frame seems to follow the suit. In case this happens, it will result in long term up ward movement in gold prices.
6. Gold is respecting 20 EMA support on monthly timeframe which is acting as a good support.
Thus, this time Gold's price seems to break earlier highs and is poised for a long term rally.
Conclusion: Accumulate in range of 1800 - 1850 with 1675 USD as strict Stop Loss on daily closing basis.
Above published for Educational purpose only. Trade in consideration with your own risk appetite, in consultation with your financial advisor.
Yours,
The Humble Trader
Many reasons which in confluence indicate that Gold has long rally to go from here (Current level 1871 USD/Ounce) as on 14 Feb 22.
1. Cup and Handle Formation on Gold Monthly Chart: Cup and Handle Pattern formation is visible on Gold's chart on Monthly time frame. Theoretically, it indicates targets of as high as Cup's depth, i.e. approx. 800 $ from here, i.e. 2600 - 2700 USD range.
2. Considering the up move that started in Oct 18 and lasted till Aug 20, Gold had shown Fibo retracement to 38.2% and bounced back from there twice. Thus, the level (1675 USD) is showing a decent support.
3. Flag Pattern: Above movement coincides with Flag Pattern, where the movement from Oct 18 to Aug 20 formed the pole and later channel formed the flag. On breakout of upper channel of flag, the targets that comes are height of flag pole. i.e. approx. 800 USD. This again coincides with 2600 - 2700 USD range target.
4. Geopolitical regime: Current rows between Russia and Ukraine may lead a shift in asset allocation from riskier to safe asset class, i.e. Gold.
5. RSI Indicators: Momentum of daily RSI had already crossed crucial 60 levels and weekly and monthly time frame seems to follow the suit. In case this happens, it will result in long term up ward movement in gold prices.
6. Gold is respecting 20 EMA support on monthly timeframe which is acting as a good support.
Thus, this time Gold's price seems to break earlier highs and is poised for a long term rally.
Conclusion: Accumulate in range of 1800 - 1850 with 1675 USD as strict Stop Loss on daily closing basis.
Above published for Educational purpose only. Trade in consideration with your own risk appetite, in consultation with your financial advisor.
Yours,
The Humble Trader