Gold Rallying to Uncharted Area

New York buildings in gold and stockpiles of gold.
.02 Apr 2024
author avatar image Andreas Thalassinos

Table of Contents

Briefing on Gold

  • Gold rallying to uncharted area
  • Financial instrument: Gold 
  • Timeframe: Daily
  • Session: Tokyo
  • Trend: Up
  • Trend Confirmation: Exponential Moving Average(EMA), Relative Strength Index(RSI), Moving Average Convergence/Divergence(MACD)
  • Momentum: MACD Signal
  • Support Levels: 2211.17, 2186.06, 2138.45, 2113.34
  • Resistance Levels: 2265.68, 2332.00, 2443.00
  • Trading Strategy: Buy on Dips, Buy on Breakouts

High Impact Economic Events

  • Monday, April 1, 02:00 pm (GMT+0), USD: ISM Manufacturing PMI
  • Tuesday, April 2, All Day, EUR: German Prelim CPI m/m 
  • Tuesday, April 2, 02:00 pm (GMT+0), USD: JOLTS Job Openings
  • Wednesday, April 3, 12:15 pm (GMT+0), USD: ISM Services PMI
  • Wednesday, April 3, 02:00 pm (GMT+0), USD: Unemployment Claims 
  • Thursday, April 4, 06:30 am (GMT+0), CHF: CPI m/m m/m 
  • Thursday, April 4, 27, 12:30 pm (GMT+0), USD: Unemployment Claims
  • Friday, April 5, 12:30 pm (GMT+0), CAD: Employment Change
  • Friday, April 5, 12:30 pm (GMT+0), CAD: Unemployment Rate
  • Friday, April 5, 12:30 pm (GMT+0), USD: Average Hourly Earnings m/m
  • Friday, April 5, 12:30 pm (GMT+0), USD: Non-Farm Employment Change
  • Friday, April 5, 12:30 pm (GMT+0), USD: Unemployment Rate

Trend Analysis for Gold – Gold Rallying to Uncharted Area

Gold April 1

Since February 14, Gold has exhibited an extraordinary bullish trend, with higher highs and higher lows evident in the daily timeframe. This upward movement suggests that buyers have dominated the market, pulling the precious metal to fresh all-time highs. Although, undoubtedly, price is the most important tool in a technical analyst’s “toolbox,” statistical tools such as indicators and oscillators may provide helpful insights to decipher the market’s psychology.

Indicators and Oscillators Analysis

The Relative Strength Index (RSI) is above the 50-baseline, hovering above the overbought territory, indicating that the pair may be due to a potential reversal or temporary rebound from the current resistance zone. However, traders should exercise caution, as RSI alone may not be a reliable indicator. Additionally, the Bollinger Bands suggest widening volatility as the Upper and Lower Bands diverge and prices close above the Upper Band, indicating a continuation of the uptrend.

The Exponential Moving Average and the Moving Average Convergence/Divergence (MACD) also confirm the upward movement. In particular, prices are trading above the Moving Average line, and MACD rose above the baseline.

Additionally, the MACD oscillator indicates a bullish momentum, with the MACD above the Signal line. 

Key Support Levels for Gold

At a closer examination, one can notice a negative divergence between the Gold price and the Relative Strength Index, suggesting a possible retracement. The first support level is seen at 2211.17 US dollars per ounce. If the bears manage to push the Gold lower, the next support is estimated at 2186.06. Subsequently, if this level is breached, it may indicate further potential for a downturn, with the next significant support levels being observed around 2332.00 and 2443.00.

S1–>2211.17

S2–>2186.06

S3–>2332.00 

S4–>2443.00

Key Resistance Levels for Gold

Should the bulls maintain control of the market, we anticipate the possibility of achieving gains in the future, although potential resistance is expected to arise at several levels. The initial resistance level is estimated to be around 2265.68. Thereafter, we project that resistance will be seen at 2332.00 and 2443.00, respectively.

R1–> 2265.68

R2–>2332.00

R3–>2443.00

Trading Strategy for Gold

Based on the technical analysis, traders may consider adding to their positions above the all-time high of 2211.17

On the other hand, aggressive traders may explore short-term selling opportunities on dips towards support levels, with tight stop-loss orders to manage risk effectively. Additionally, if the bullish momentum persists and candlesticks close above the Upper Bollinger Band, indicating a continuation of the uptrend, traders may take advantage of the rising prices with long positions.

Conclusion

In conclusion, the technical analysis of Gold suggests a bullish bias in the short term, with the precious metal testing critical resistance levels. Traders should closely monitor price action around key support and resistance zones, along with relevant technical indicators, to identify potential trading opportunities and manage risk effectively in the current market environment. 

author avatar image
Andreas Thalassinos

Experienced educator with a demonstrated history of working in the financial services industry. Skilled in Technical Analysis, Market Risk, Asset Management, Stock Market, and Trading Systems. Strong professional with a MSTA by Society of Technical Analysts (UK), CFTe and MFTA focused in Master of Financial Technical Analysis from International Federation of Technical Analysts (USA).