Gold Just Keeps Disappointing

Gold Technical Analysis

Gold traders aren’t having an easy life these days. Returns aren’t satisfying holders of this precious metal and most recently, it’s gotten even worse. The month of May started with the new mid-term lows and it seems that it’s not the end of the troubles.

What can be satisfying here is that Gold is respecting technical analysis principles in general, and the Fibonacci levels in particular. After we set the local top in March, the price has been in correction mode, a correction which is moving swiftly between Fibo levels. First, 23,6% acted as a resistance in April and most recently, 50% as a support and 38,2% as a resistance.

Trading Strategy

May also brought us a breakout of the 50%, which in my opinion, is a legitimate signal to sell. The first target is on the long-term up trendline (red) connecting higher lows since August 2021. It seems almost certain that we’ll get there as we’re currently not that far away. In case of a breakout, the next support will be on the 61.8%. What happens later depends on many factors, so let’s just focus on the nearest future. The future which for gold, does not look very bright.

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