Gold Technical Outlook: Short - Term Range Remains In Place Ahead Of The Fed

1. Gold Technical Outlook: Short-term
Range Remains In Place Ahead Of
The Fed

2. Points To Be Discussed Today:
• Gold Continues To Be Attracted
• Gold On A Shorter-Term Basis
• The Topside Of Gold
• Gold Daily Price Chart
• Gold Strategy
• XAU/USD - Gold Spot US Dollar
• XAU/USD Technical Analysis

3. Fibonacci Support And Resistance
• Tapering is fully expected but will the Fed
provide a hawkish twist?
• Fibonacci support and resistance are in place
for now.
• The Federal Reserve is fully expected to begin
reining in its $120 billion a month bond-
buying program imminently, ending an era of
ultra-loose monetary policy.

4. The US dollar (DXY)
• The tapering program is expected to begin this
month and, depending on the rate and flexibility
announced, end in mid-2022.
• While the market has already priced tapering in,
it is the rate at which the central bank reduces
the number of bonds that it buys every month
that will be key.
• The US dollar (DXY) is currently trading on either
side of 94, just below its recent one-year high of
94.55, ahead of the Fed’s announcement.

5. Gold Continues To Be Attracted
• Gold continues to be attracted to the 50%
Fibonacci retracement level at $1,763.5/oz. with
recent sell-offs being reined back quickly.
• The trend channel off the recent double low
around $1,721/oz. has given traders an
opportunity to benefit from positive price action,
but with this now broken, and with the current
spot price entangled with all three simple moving
averages, the outlook for gold looks increasingly
unclear.

6. Gold A Further Mixed Outlook
• A hawkish turn by the Fed today will likely see the
50% Fib level retested, while a more dovish
outlook will see the October 22 high at
$1,813/oz. the first upside target, before the
38.2% Fib retracement at $1,837/oz.
• This level has held over the past four months.
While retail traders remain net-long of the
precious metal – see below – the number of net-
short positions has increased sharply over the
last week, giving gold a further mixed outlook.

7. Gold On A Shorter-Term Basis
• Gold on a shorter-term basis begins to get a bit
messier, but there is some context to work with.
• From the daily chart below, we can see an area
that’s been fairly sticky for support, and that’s
around the 1680 level that was tested twice in
March of this year.
• As a matter of fact, that was a double bottom
formation that filled-in quite nicely shortly after
the Q2 open.

8. The Topside Of Gold
• But early-Q2 was also when rates were
receding from the Q1 spike.
• And when the Fed showed little interest in
hiking rates, there was more reason for rates
to slack and that continued to push the
topside of gold into early-June, at which point
the psychological level of 1900 came back into
the equation and gold prices weren’t able to
make much ground beyond that level.

9. The Topside Of Gold - I
• After price action grinded there for a few
weeks bears finally prevailed and pushed back
down to the 1750 level before the July open.
• Collectively, when this sticky zone of support
is combined with the series of lower-highs
that have printed since last year’s top, and
there’s a descending triangle formation that’s
starting to show with horizontal support being
paired up with lower-high resistance.

10. Gold Daily Price Chart

11. Gold Strategy
• From a longer-term basis the approach can
become a bit more clear: A breach of 1680
support or 1834 resistance can open the door
for trending scenarios.
• Until then, however, gold prices are prone to
more noise and shakiness in near-term setups.
• There could be some workable context there,
but this must be taken with the above in
mind.

12. Gold Strategy - I
• But last Friday a short-term rising wedge pattern
developing which will often be approached with the
aim of bearish reversals.
• Friday saw prices begin to breach below the
formation, and yesterday saw a pullback to resistance
on the underside of this formation.
• This can keep the door open for short-term bearish
scenarios in gold ahead of FOMC, and if the Fed does
take a hawkish twist at tomorrow’s rate decision, the
fundamental backdrop could further push the trend
potential being highlighted by this technical formation.

13. Gold Four-Hour Price Chart

14. XAU/USD - Gold Spot US Dollar

15. XAU/USD Technical Analysis

16. Moving Averages

17. Momentum Oscillators

18. Trend Oscillators & Volatility

19. Pivot Points

20. Gold Technical Outlook: Short-term
Range Remains In Place Ahead Of
The Fed

21. Thanks for listening
Gold Technical Outlook: Short-term
Range Remains In Place Ahead Of
The Fed