Gold - XAU is in choppy waters

24 thg 5, 2022

In our last post on gold from early May 2022 before the FOMC, we reiterated our long-term bullish stance on it. However, we stated that we expected profit-taking to ensue in the short-term, especially if the stock market continued lower. We also speculated about a possible short-lived dip in gold towards 1800 USD. Since then, gold has made a new low at 1786.785 USD and then started to reverse to the upside. Currently, XAUUSD trades around the 1860 USD price tag. Our price targets stay at 2100 USD and 2300 USD. However, we are still cautious due to the possibility of profit-taking in gold continuing further if the stock market selloff continues. Nevertheless, we must note that gold is doing exceptionally well in the current market conditions. Therefore, we will continue to monitor gold closely and look for more clues revealing price direction in the short term.

* Among foes to rising gold prices, we consider higher interest rates in the U.S. and around the globe. Additionally, we see also pressure from economic tightening.

Technical analysis - daily time frame
RSI and MACD turned bullish recently. MACD points to the upside, which is bullish; however, it remains in the bearish territory. DM+ and DM- show converging, which is bullish as well. The ADX decreases, suggesting the bearish trend is weakening. Overall, the daily time frame is neutral/slightly bullish.

Technical analysis - weekly time frame
RSI strives to break the bearish structure; if it manages to do so, it will bolster the bullish case for gold. Stochastic is bearish. MACD is also bearish; however, it remains in the bullish zone. DM+ and DM- produce whipsaws, making them neutral. ADX contains a relatively low value suggesting the presence of a neutral trend. Overall, the weekly time frame is neutral.

Please feel free to express your ideas and thoughts in the comment section.