. GOLD Technical Analysis: Up Channel Trading & Profit Opportunities

GOLD Technical Analysis: Up Channel Trading & Profit Opportunities

GOLD Technical Analysis: Up Channel Trading & Profit Opportunities

07 Feb 2024

The price of gold continues its range-bound movement amid uncertainty regarding a potential Federal Reserve rate cut and a slight decline in the US dollar.

FUNDAMENTAL OVERVIEW:

The gold price (XAU/USD) finds it challenging to build on the positive momentum from the previous day, remaining within a narrow trading range during the early European session on Wednesday.

The gold price (XAU/USD) faces difficulty building on the positive momentum from the previous day, hovering within a narrow trading band during the early European session on Wednesday. Investors increasingly believe the Federal Reserve (Fed) will maintain higher interest rates due to the resilient US economy, acting as a deterrent for the non-yielding bullion. Additionally, a positive sentiment in the equity markets contributes to the weakening appeal of the safe-haven commodity, driven by optimism about a resolution in the Middle East crisis.

Despite downward pressure on the gold price, traders are exercising caution, refraining from aggressive bets and opting to await more signals regarding the potential timing and extent of interest rate cuts by the Federal Reserve this year. Attention will be closely directed towards next week’s release of the latest US consumer inflation figures, as they could impact the Fed’s future policy decisions and influence XAU/USD. Meanwhile, on Wednesday, traders will look to the US Trade Balance data and speeches by Fed officials for short-term opportunities in the commodity market.

Gold is anticipated to gain from a future decline in interest rates. However, many indications point towards this scenario unfolding later in 2024 rather than earlier.

GOLD TECHNICAL ANALYSIS DAILY CHART:

Technical Overview:

Gold is trading within an up channel.

Gold is positioned above 5&50 the Moving Averages (SMA).

The Relative Strength Index (RSI) is in the Buying zone, while the Stochastic oscillator suggests a Positive trend.

Immediate Resistance level: 2034.37

Immediate support level: 2026.86

HOW TO TRADE GOLD

Following an initial ascent, gold encountered rejection, leading to a decline. Subsequently, it entered a substantial trading range. Gold is attempting to move higher and is currently positioned around a resistance zone. A potential breakthrough of this zone could pave the way for further upside.

TRADE SUGGESTION- STOP BUY– 2038.75, TAKE PROFIT AT- 2054.64, SL AT- 2030.01.