Gold’s Fall Halt at 2305-The Choppy Trap-Bullish Bias
Gold’s Fall Take A Halt Close To 2305-The Choppy Trap-A Weekly Bullish Bias
Gold Price Tracking US Treasury Bond Yields
This week, gold prices have closely tracked the movements in US Treasury bond yields. The previous decline in gold prices has paused in 2285-2305 support zone amid a modest weakness in US Treasury bond yields.
18th June 2024 - Running upside for 2358 Target
Equity Markets and Indian Elections
Global equity markets have extended their rally, gaining momentum particularly from the results of the Indian general election. The election unfolded in favor of the existing government NDA, leading to Prime Minister Narendra Modi securing a third term as declared a clear winner in the General election 2024 which went for more than a month. This political stability has propelled the Indian market index, Nifty, which saw a significant rise from the lows of 21,281 on June 4, 2024, closing the session at 23,562 on June 18, 2024 but saw a knee jerk reaction as it failed to surpass its 400 seat remark made by the existing party fellows. Going forward, A pause and potential correction below the 23,350-23,400 range for Nifty could support a short-term rally in gold prices.
Technical Analysis of Gold
Yellow Metal has been doing sideways since its all time of 2453.7 USD as of 20th May 2024.
Support Zones
Technically, gold has a strong support zone between 2,285 and 2,300, which has been acting as a bounce pad for the yellow metal.
Harmonic Bullish Pattern
An unfolding harmonic bullish Gartley pattern, has been observed close from the support zone of 2285-2305 zone. Gold prices have reached a few upside targets for the harmonic pattern, encountering resistance at the 200 EMA (Exponential Moving Average) based on a 2-hour calculation at 2,345. This level is crucial for further movements.
Wave Analysis
Yellow metal could be doing a choppy sideways correction & could unfold as a triangular correction yet to be confirmed & needs further price inputs. since its sideways move from 2448.8 as of 12th April 2024.
Trading Strategies
Plan A
Trigger: Faces resistance in the 2,395-2,405 USD zone
Target: Potential drop to the 2,345-2,355 USD zone for a short-term correction
Getting resistance in 2395-2405 - Harmonic Bat Pattern will become active for targets suggested in Plan A
Plan B
Long-Term View:
Trigger: Crosses above 2,405 USD, a critical level
Target: Push towards the all-time high (ATH) of 2,450 USD
Conclusion
Gold's price movements are intricately linked with US Treasury bond yields and global market dynamics, including political developments. Investors should watch the key technical levels for India Nifty, getting a pause for equity indices could boost the upside potential of yellow metal in next few sessions and should employ appropriate trading strategies as discussed to capitalize on potential market movements. The trading strategies suggested above offer a structured approach to navigating gold's price action in the current market environment.
