Will Gold (XAU/USD) continue to move lower over the long-haul?
This is a weekly chart of Gold.
During the first week of August 2020, XAU/USD made an all-time high of 2075.11. During the week of March 7th, 2022, XAU/USD came within a few dollars of reaching that peak again, forming a double top.
The target for a double top is the height between the 2 peaks of the top, added to the breakdown point. In this case, it is near 1290.
Notice the correlation between the US Dollar Index (DXY) and Gold in the bottom panel of the chart. The current correlation is -0.92. Readings below -0.80 are considered strong negative correlations. Therefore, if the DXY continues to move higher, Gold should continue to move lower on the weekly timeframe (as long as the correlation remains).
First confluence of support is at the lows from the last week of September and the 50% retracement level from the lows of August 2018 to the highs of August 2020, near 1615.
If price breaks below there, support is at the 61.8% Fibonacci retracement level from the same timeframe near 1510 , then the lows from the week of March 2020 at 1451.27.
However, if the double top plays out, price could reach 1290!
During the first week of August 2020, XAU/USD made an all-time high of 2075.11. During the week of March 7th, 2022, XAU/USD came within a few dollars of reaching that peak again, forming a double top.
The target for a double top is the height between the 2 peaks of the top, added to the breakdown point. In this case, it is near 1290.
Notice the correlation between the US Dollar Index (DXY) and Gold in the bottom panel of the chart. The current correlation is -0.92. Readings below -0.80 are considered strong negative correlations. Therefore, if the DXY continues to move higher, Gold should continue to move lower on the weekly timeframe (as long as the correlation remains).
First confluence of support is at the lows from the last week of September and the 50% retracement level from the lows of August 2018 to the highs of August 2020, near 1615.
If price breaks below there, support is at the 61.8% Fibonacci retracement level from the same timeframe near 1510 , then the lows from the week of March 2020 at 1451.27.
However, if the double top plays out, price could reach 1290!
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