Yields on a strong upswing / Gold looking weak ahead of Fed for OANDA:XAUUSD by goldenBear88

Gold’s general commentary: Gold was Trading within an broken Channel Up on Hourly 4 chart with the latest Weekly Low at #1,765.80 (representing configuration only few points from strong Support aswell) as the Lower High lower zone is priced at #1,782.80 extension. If Lower High upper zone gets broken to the upside, my pattern is invalidated. In my opinion, I should keep focusing on the Hourly 4 chart #1,760.80 strong Support level and enormous Selling pressure (from Bond Yields) which aims lower Targets below the Hourly 4 Support (such as #1,727.80 and #1,700.80 psychological barrier) which is the key level and decent Medium-term Bearish variance. So as long as the Lower High upper zone and Hourly 4 Support are intact, Gold will be under huge Volatility , following identical movements as Bond Yields, where further Buying is not advisable. Since #1,800.80 is not invalidated, solid chance exist for a re-test of #1,760.80 (even a Top of Higher Low zone at #1,744.80, if the #1,782.80 Resistance holds). If #1,800.80 Resistance breaks, Gold will most likely resume the Short-term Bull trend towards #1,817.80. I doubt this week’s news are enough to push through, most likely the market (and Bond Yields which is the key for Gold’s recent struggles) is waiting for a catalyst. Statistically, every time from September #2 / when RSI get’s rejected near the Resistance (what is the case at the moment), Price-action starts the aggressive decline of #40$ points within #2 sessions. I am not yet interested in Buying, as there is only #1 strong Support between current Price-action and #1,800.80 psychological barrier, which is far away from current variance. It is important to note that I am expecting Gold to finish May below #1,678.80 Lower Low extension.

Technical analysis: As discussed, Gold reached Top (#1,792.80) by strongly rejecting the Price-action few sessions ago and should slowly start losing value. I once more witnessed that the market is pretty unstable these sessions and that I should approach post Fed rate hikes with extreme caution since that kind of announcement always bring turbulence on the markets. There isn’t big Price-action difference between Gold’s Spot prices ( Xau-Usd ) and Futures contracts, which means that during these Volatile times Investors will move their capital from riskier assets (Stock markets, Equities) to Gold as a safe-haven that it represents for a long period of time, but with the ever-growing Inflation , Investors may choose Bond Yields, and very own new meta (which is the case lately), Bitcoin . The Hourly 4 chart’s Channel Up was broken and was testing the Lower High trendline, but I doubt it’s strength since Gold is Overbought almost on all charts. With DX Neutral below the Resistance after decent Fundamental readings, I doubt Gold has more upside momentum to go higher since DX shouldn’t dip anymore, but as repeated many times, Gold is ignoring DX movements and is more tied to Bond Yields. Truth is that unchanged Fed rate could be catastrophic for DX , but what’s keeping Gold on current levels (and not in further decline) also besides the general state of the economy, are Bond Yields which are soaring (along with Inflation , who’s chart is on ATH ), decent Bullish sentiment on the Bond Yields which may be due to the relief (output cut) news from the Oil sector (against the reality of the Jobless claims numbers), so in my opinion I may get the real Bearish move on tomorrow’s session as U.S. opening Bell approaches, and possible Resistance rejection would be ideal Selling opportunity.

My position: The inability to get above the Higher High extension on the Daily chart along with the sharp uptrend on Bond Yields, are putting Gold under pressure again (as I stated many times, if Gold don’t recover #1,800.80, Gold will dip). At the same time DX (on a # +0.11%) has made a new Bottom and is Neutral at the moment. Gold is on an interesting Technical fractal on the Hourly 4 chart, where Yields are soaring (# +3.41%) on positive sentiment as Inflation rises ( ATH ) and Money supply chart aswell on ATH . I will take my chances since Gold is still on stagnation candles, and keep operating with my Selling order as long as Yields are skyrocketing, with my Selling orders intact from #1,775.80 / calling for #1,740.80 extension. I will add more Selling orders if #1,760.80 breaks, and will keep track on Bond Yields. My plan is to keep my Selling orders and if they don’t deliver results, gradually close it near the Fed minutes within #8 hour’s time.

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