Bulls take control, Gold hits new record high $3,547, pullback ahead ?
- Gold Updates New Record High $3547.
- Markets price in 25 BPS rate cut.
- ETF Gold inflow at record high.
- Global Central Banks step up Gold purchase.
- Markets await JOLTS and Non Farm Payroll numbers for further clues.
Four months long consolidation beginning from 22nd April when Gold recorded all-time high at the psychological mark $3500, and a follow-up $380 correctional wave, Gold finally staged a robust breakout above the triangular structure and reached a new record $3547.
What caused the bullish rally?
- Strong buying by global central banks as safe haven asset in the view of political chaos.
- SPDR Gold Trust holdings rise 1.32% highest since August 2022.
- Concerns over Fed's autonomy and independence, political pressure on the Fed, attempts to influence or dismiss Fed officials, together shake investor confidence in Dollar and Treasury Bonds, causing Gold rush as safe haven asset.
- Markets price in 92% probability of 25 BPS rate cut by Fed in mid September, boosting Gold demand.
What's next from here?
Gold has achieved its Triangular breakout targets at $3545 and a retracement/correction is very likely towards support areas to gather enough momentum for embarking on a new bullish extension.
Price action remains sideways within a tight range, consolidating below $3542 and above immediate support 4 hourly 5 EMA $3530.
If bulls succeed in break above $3542-$3547, the next immediate resistance sits at $3555 above which next major resistance will come at $3573-$3578.
On the flip side, a sustained break below $3530-$3525 will call for decline to $3515-$3508 followed by $3498-$3588 while next support sits at $3470-$3466.
If selling intensifies, 4 Hourly 50 EMA $3440 is turning point for rebound or retracement going deeper towards $3415.
Author
Sunil Kumar Dixit
SK Charting
Sunil Kumar Dixit is Chief Technical Strategist and founder of SK Charting, a research firm based in India. He tracks Precious Metals, Energy, Indices and Currency Pairs. He also participates as an expert panellist on Channel Television, Nigeria.
