Gold analysis: Testing key resistances

2022年10月4日

Gold is back above $1,700, which is where it was in the middle of September, up 5% on the week.

A drop in Treasury yields and a weaker dollar have aided gold's rise as the market speculates on the end of Fed rate hikes.

From their 4% peak in September, US 10-year Treasury yields (US10Y) have decreased by almost 40 basis points in the last few session, and real yields (DFII10) also dropped.

Simultaneously, the DXY index decreased from 114.1 on September 27 to 110.6. Overall, gold confirmed its inverse relationship with both the USD and real yields.

https://www.tradingview.com/x/SbWcU98g/

What does gold's chart analysis show?

Gold prices are currently testing a multi-resistance zone between $1,710 and $1,720, defined by the bearish trendline from March's 2022 highs, the 50-day moving average, and the 23.6% Fibonacci retracement levels of the 2022 high-low range.

Previously, gold prices encountered resistance at the 2022 bearish trendline and retreated in mid-August.

The MACD is forming a bullish crossover, and the RSI is moving above 50 for the first time since mid-August, according to the oscillator analysis, which supports a short-term upward trend.

If this multi-resistance region is broken, it could signal an extension of the bullish wave towards $1,788 (38.2% Fibonacci) and $1,800-1.810 (August highs) as potential short-term targets. If prices retreated from the resistance, $1,680 serves as the first support for placing stop.

Idea written by Piero Cingari, forex and commodity analyst at Capital.com