Elevated Inflation News Amplify Safe Haven Demand for Gold 🧈
Abstract:
Recent inflation data from the Federal Reserve has fueled concerns over persistent price pressures. In this environment, gold's inherent value as a haven asset stands to benefit. My open-source Adaptive MFT Extremum Pivots indicator, which can be applied across various markets, reveals support and resistance levels on the gold market. Based on these calculations, the nearest resistance zone lies around $2055, while the mathematical middle of all resistances is estimated to be around $2072. A potential trade setup involves purchasing gold upon breaching the nearest resistance level. Aim for a target price slightly above the resistance level, allowing for potential retracements. Establish a stop-loss order below the recent price consolidation zone. Alternatively, consider purchasing gold upon bouncing from the nearest support level. Aim slightly above the resistance level, again with a stop-loss order below the recent price consolidation zone.
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Dear Esteemed Readers, Fellow Analysts,
I. News Catalyst:
1: Higher-Than-Expected Inflation Reading: The recent inflation data from the Federal Reserve suggests persistent inflationary pressures.
Implications for Gold:
2: Safe Haven Demand Amplified: Gold's inherent value as a haven asset is further enhanced amidst heightened inflation.
3: Technical Outlook Optimistic: Gold's recent price trend and favorable technical indicators indicate potential upside movement.
II. Chart Description:
1: Indicator:
I've used my open-source Adaptive MFT Extremum Pivots indicator to autonomously compute the support and resistance levels. I tried to write this indicator, which you find among relevant publications, as general as I could. The gold market is only one of my choices where I deployed this script. You can try it on any of this and any other markets. If you've got feedback, I'd be happy to update what I've got or create a new branch to experiment with your unique approach. You can change the indicator without coding knowledge through the user configuration block like colors and precision (!) per the documentation I wrote. The script is "adaptive" because you'll always get a bit of different data on the same market depending on the moment you use this indicator. But that's good because you can monitor the data velocity between time points with this knowledge. As I mentioned, the script is general and in the following, I'll explain how it helped me to write this particular analytics on the gold market.
![Adaptive MFT Extremum Pivots [Elysian_Mind]](https://static.tradingview.com/static/images/svg/idea-image-placeholder.svg)
2: Data Explanation and Chart Elements:
You can find the script's window in the bottom right corner of the chart. As you can see in the center of the table, the Pivot point is about $2044.948. The script computed this data from a monthly timeframe. In the upper half of the window, you find the monthly high ($2075.430), monthly low ($2033.940), weekly high ($2148.990), and weekly low ($2020.135) values on this market. The latter two data came from a weekly timeframe. So, you can consider this analytics to be a Multi-TimeFrame Analytics (MTF or MTFA, see the keywords.
S1, S2, and S3 mean three support levels (green lines on the chart) and R1, R2, and R3 mean three resistance levels (red lines on the chart). I named the levels according to their distance from the pivot point. S1/R1 are the closest and S3/R3 are the most distant levels. The actual price is $2033.050. The price's a bit below the pivot point, which could be a bearish signal. In this context, however, I'd call it a retracement because it's above the double support levels of $2020 and $1998. The third support level is around $1971. If you remember my messages from the chat, you know I estimated the support zone around $2000, see the green zone on the chart, which aligns with the mathematical middle level of the support levels. I believe these computations could make a bit of sense because if you look to the left of the chart, you'll see how the price bounced repeatedly from either of these supports or got rejected at either of these resistances. I'd point out the interval between 19 April and 02 May 2023 to observe these price actions. With the price consolidating above all the support levels, I'd estimate an attempt to breach the resistances. The nearest resistance is around $2055 while the mathematical middle of all the resistances is around $2072, see the red zone on the chart. If the positive news persists on the market, I estimate the price could reach as high as $2055 (R1), $2087 (R2), and $2098 (R3). You find all these data with higher precision in the bottom half of the script's window, the bottom right corner of the chart.
The dotted arrows depict various price scenarios that gold could follow. The more pronounced the bullish momentum, the less retracement we can expect. In the most optimistic scenario, gold could reach resistance R3 from its current support levels. However, if demand weakens, the price might briefly dip to support S2 or even S3. Still, a breakdown below S3 would be necessary to invalidate the bullish trend. As long as the bullish trend remains intact, resistances R1 and R2 remain attainable targets. Below, I propose some possible positions according to a support/resistance strategy.
You can interpret the market in various ways and the sentiment dynamically changes. That's why I made the script adaptive. You can load to your chart any time and see the market dynamics. Furthermore, I'm open to all confirmation, conflicting, extending, or questioning opinions of yours.
III. Trade Setup:
Entry Point: Consider purchasing gold upon breaching the nearest resistance level.
Target Price: Aim slightly above the resistance level, allowing for potential retracement.
Stop-Loss: Establish a stop-loss order below the recent price consolidation zone.
And:
Entry Point: Consider purchasing gold upon bouncing from the nearest support level.
Target Price: Aim slightly above the resistance level, allowing for potential retracement.
Stop-Loss: Establish a stop-loss order below the recent price consolidation zone.
IV. Risk Disclosure:
Please note: This is solely a speculative outlook based on current economic developments and does not constitute investment advice. Trading in financial markets carries inherent risks, and past performance is not indicative of future results.
Kind regards,
Ely
Recent inflation data from the Federal Reserve has fueled concerns over persistent price pressures. In this environment, gold's inherent value as a haven asset stands to benefit. My open-source Adaptive MFT Extremum Pivots indicator, which can be applied across various markets, reveals support and resistance levels on the gold market. Based on these calculations, the nearest resistance zone lies around $2055, while the mathematical middle of all resistances is estimated to be around $2072. A potential trade setup involves purchasing gold upon breaching the nearest resistance level. Aim for a target price slightly above the resistance level, allowing for potential retracements. Establish a stop-loss order below the recent price consolidation zone. Alternatively, consider purchasing gold upon bouncing from the nearest support level. Aim slightly above the resistance level, again with a stop-loss order below the recent price consolidation zone.
---
Dear Esteemed Readers, Fellow Analysts,
I. News Catalyst:
1: Higher-Than-Expected Inflation Reading: The recent inflation data from the Federal Reserve suggests persistent inflationary pressures.
Implications for Gold:
2: Safe Haven Demand Amplified: Gold's inherent value as a haven asset is further enhanced amidst heightened inflation.
3: Technical Outlook Optimistic: Gold's recent price trend and favorable technical indicators indicate potential upside movement.
II. Chart Description:
1: Indicator:
I've used my open-source Adaptive MFT Extremum Pivots indicator to autonomously compute the support and resistance levels. I tried to write this indicator, which you find among relevant publications, as general as I could. The gold market is only one of my choices where I deployed this script. You can try it on any of this and any other markets. If you've got feedback, I'd be happy to update what I've got or create a new branch to experiment with your unique approach. You can change the indicator without coding knowledge through the user configuration block like colors and precision (!) per the documentation I wrote. The script is "adaptive" because you'll always get a bit of different data on the same market depending on the moment you use this indicator. But that's good because you can monitor the data velocity between time points with this knowledge. As I mentioned, the script is general and in the following, I'll explain how it helped me to write this particular analytics on the gold market.
![Adaptive MFT Extremum Pivots [Elysian_Mind]](https://s3.tradingview.com/u/uxLcYiUV_big.png)
2: Data Explanation and Chart Elements:
You can find the script's window in the bottom right corner of the chart. As you can see in the center of the table, the Pivot point is about $2044.948. The script computed this data from a monthly timeframe. In the upper half of the window, you find the monthly high ($2075.430), monthly low ($2033.940), weekly high ($2148.990), and weekly low ($2020.135) values on this market. The latter two data came from a weekly timeframe. So, you can consider this analytics to be a Multi-TimeFrame Analytics (MTF or MTFA, see the keywords.
S1, S2, and S3 mean three support levels (green lines on the chart) and R1, R2, and R3 mean three resistance levels (red lines on the chart). I named the levels according to their distance from the pivot point. S1/R1 are the closest and S3/R3 are the most distant levels. The actual price is $2033.050. The price's a bit below the pivot point, which could be a bearish signal. In this context, however, I'd call it a retracement because it's above the double support levels of $2020 and $1998. The third support level is around $1971. If you remember my messages from the chat, you know I estimated the support zone around $2000, see the green zone on the chart, which aligns with the mathematical middle level of the support levels. I believe these computations could make a bit of sense because if you look to the left of the chart, you'll see how the price bounced repeatedly from either of these supports or got rejected at either of these resistances. I'd point out the interval between 19 April and 02 May 2023 to observe these price actions. With the price consolidating above all the support levels, I'd estimate an attempt to breach the resistances. The nearest resistance is around $2055 while the mathematical middle of all the resistances is around $2072, see the red zone on the chart. If the positive news persists on the market, I estimate the price could reach as high as $2055 (R1), $2087 (R2), and $2098 (R3). You find all these data with higher precision in the bottom half of the script's window, the bottom right corner of the chart.
The dotted arrows depict various price scenarios that gold could follow. The more pronounced the bullish momentum, the less retracement we can expect. In the most optimistic scenario, gold could reach resistance R3 from its current support levels. However, if demand weakens, the price might briefly dip to support S2 or even S3. Still, a breakdown below S3 would be necessary to invalidate the bullish trend. As long as the bullish trend remains intact, resistances R1 and R2 remain attainable targets. Below, I propose some possible positions according to a support/resistance strategy.
You can interpret the market in various ways and the sentiment dynamically changes. That's why I made the script adaptive. You can load to your chart any time and see the market dynamics. Furthermore, I'm open to all confirmation, conflicting, extending, or questioning opinions of yours.
III. Trade Setup:
Entry Point: Consider purchasing gold upon breaching the nearest resistance level.
Target Price: Aim slightly above the resistance level, allowing for potential retracement.
Stop-Loss: Establish a stop-loss order below the recent price consolidation zone.
And:
Entry Point: Consider purchasing gold upon bouncing from the nearest support level.
Target Price: Aim slightly above the resistance level, allowing for potential retracement.
Stop-Loss: Establish a stop-loss order below the recent price consolidation zone.
IV. Risk Disclosure:
Please note: This is solely a speculative outlook based on current economic developments and does not constitute investment advice. Trading in financial markets carries inherent risks, and past performance is not indicative of future results.
Kind regards,
Ely
Comment:
I don't have any proof that gold won't break the support down, but we've already seen the support being there. I mean the bounce in the previous three days. Our precious gold was falling, but it temporarily reversed at the predicted $1998 level. Ever since the bulls have forced a positive retracement to $2004.440 support. You can find this support in the bottom right corner of my indicator table on the bottom right cover of the screen. The line is called S2.
Comment:
Gold's near a possible long position's potential entry price. While DSI/DSIE confirmed a bearish retracement 🐻, the $1980 support level can surprise bears. I wouldn't open a short and wouldn't open a long yet. I hold the short I already have from higher entries and think about a long swap if the price reacts positively to the support level. The long swap would be the position on the chart. 🚀
Comment:
The previous update expected a bearish continuation because of DSI/DSIE results. If you don't know, these are sentiment analytics methods. However, the technicals are still valid. The support I mentioned $1980 is holding.
Comment:
I mentioned how DSI/DSIE can have a bearish meaning for gold. I'd like you to observe how bearish gold relates to DXY. Gold and DXY dumps often align, at the beginning, but you can see how gold presented more resilience compared to DXY, which crashed. At the same time, I gratulate if you've seen the DXY analytics in time. ✅ All DXY TPs hit within hours of sharing. I wonder when gold starts its rally.
Comment:
You see a massive bounce from the predicted support level. Forecast goes according to plan so far. However, considering the vast pump, I'd put a stop loss somewhere in the green as trail profit. 😌
Comment:
Gold's retracing now, but look at the base of the last rally. It's S3 ($1973) from the table. It's one of the pivot levels of the Adaptive MFT Extremum Pivots indicators. The predicted level and the bottom of the price action aligning might be luck, but the precision suggests there might be reasonable calculation to it.
Comment:
You appreciated the precise entry into the long position of the idea that's highly in the profit zone now. I was happy to read your feedback. You were right. The drawdown is virtually non-existent. Opening a position there instantly turned into profit. 🧈💰
Trade closed: target reached:
Gold hit the red rectangle target zone on the chart. The XAUUSD market fulfilled my forecast. The position's taken profit. Merry Christmas to you all, fellow traders!
Comment:
I know the idea's complete with success. But if someone's reading this, look at the price action. XAU fell back from my target zone. It was an excellent idea to follow the bullish trend, but also it's a good profit if you closed the position in the red target zone.
