Gold has been deeply covered during yesterday´s post…
I approached the week with a downward bias, although was expecting some more price rotation and value area probing before making the move. It never happened, and Gold it is currently trading some $17 below Sunday´s opening print.
As previously posted,
A downward scenario will provide a retest of previous levels tested over the last 10 days, mainly 1662, 1660, 1658, 1656, 1654 & 1652 as key pricepoints.
I am leaning into the possibility of increased downward pressure, if 1651 gets breached and no supportive buyers response occours. The same hypotesis I´m working with in the event 1652 is breached (first), which will likely bring price towards 1642.
I am leaning towards this scenario, unless I see a strong participacion of buyers around the current 1665 area, possibly into 1663, and that the pressure could be sustained above 1677-1675 area. In that event, I will reassess and will possibly look into higher areas of value being tested.
I was looking into 1652 as a key pricepoint/line in the sand. During the selloff, price action did not respected this level, rapidly breaching it, to find support (at least temporarely into $1644). I tend to respect these type of moves, which usually tend to resolve and follow in the same direction -see some of previous posts, here
. However, the extent of the selloff will be capped by how responsive the buying becomes.
I am hereto working with 3 different scenarios:
CONSOLIDATION: Usually, after having experienced an important vertical development, price tends to to probe into contained levels. 1652-1644 seesm to be the levels I´ll be wtahcing into this scenario
RESPONSIVE BUYING: In this case, price will experience a quick and intense reaction, funded by interested buyers looking not only to defend, but to recover the previous levles.
I´ll be looking at 1644 in the event it gets retested and how strong buying is at that level.
Alternatively, I would like to see buying lining into the current area ($1650) – My line in the sand is 1658-1655 – Price above that area, will make me reevaluate the downward bias (short-term).
1670 is my line in the sand for longer timeframes.
CONTINUATION: The original move replicates into a second leg, further deprerssing prices (sellers in control) – Seems like the higher probability scenario.
Gold is currently trading at a key level as I am writing (1648). Below, Ill be looking at 1642 & 1640-1639.50.
Ultimately, price action is the determinant factor and I´ll keep my options open into the above referenced.