The attractiveness of this idea is rather dependent on how prices act between current price (1900) and ~1885, the upper demand zone’s (green lines) “aggressive” entry. If new supply/resistance forms directly ahead of buy levels, the trade may be scrubbed because of dissatisfactory risk-reward. Something to keep in mind…
That said, we are confident that gold will at least react to the ID'd buy levels. Any time you have multiple “fresh” (not visited since formation) zones stacked consecutively, a trade is more likely to work. Also, this setup is considered somewhat of a “bear trap” as buyers previously outweighed sellers directly below the 1885 pivot, which support breakout traders will be selling . Despite its persistent strength and bullish-looking long-term charts, USD may be getting close to overdone, which could help gold’s case for a long.
This is a quick analysis and, as mentioned, numerous counterarguments can be presented, alongside a long-term chart that doesn’t look compelling, to undermine bullish gold takes. Have to run for now, but will revisit and update later.
Be smart out there!
Jon
That said, we are confident that gold will at least react to the ID'd buy levels. Any time you have multiple “fresh” (not visited since formation) zones stacked consecutively, a trade is more likely to work. Also, this setup is considered somewhat of a “bear trap” as buyers previously outweighed sellers directly below the 1885 pivot, which support breakout traders will be selling . Despite its persistent strength and bullish-looking long-term charts, USD may be getting close to overdone, which could help gold’s case for a long.
This is a quick analysis and, as mentioned, numerous counterarguments can be presented, alongside a long-term chart that doesn’t look compelling, to undermine bullish gold takes. Have to run for now, but will revisit and update later.
Be smart out there!
Jon
Comment:
Realizing that we accidentally posted the wrong XAU/GC chart here, but that's OK. Be aware that there is an additional 360-minute/6-hour XAU demand zone 1854.185-1867.035. The refined (reduced timeframe) GC zone we're watching is 1875.70-1886.9 (180-minute/3-hour continuous chart). An existing futures gap, which was established on 3/10, is yet to be filled @ 1872.70 - another element to consider... As gold approaches the aforementioned levels, use lower timeframes for reversal signs. Finally, DXY supply is higher (107.17-107.99), so may still be too early to establish longs. We're opting to be more conservative vs. less given long-term structure and the prevailing behavior of broader markets. Godspeed!