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Gold Faces Triangle Pattern Resistance Ahead of Key Economic Reports

Gold Faces Triangle Pattern Resistance Ahead of Key Economic Reports

Wednesday Market Overview:

Gold prices edged higher in Asian trading on Wednesday, driven by a slight decline in the US Dollar Index following remarks from Federal Reserve Chairman Jerome Powell. Despite this uptick, gold remains within the sideways range established throughout most of June, as traders continue to maintain a cautious stance towards the dollar, awaiting further indications on US interest rates.

Technical Analysis:

On the daily chart, gold is challenging the upper boundary of a symmetrical triangle pattern that has been forming since late April. Buyers have pushed the price above the critical level of 2339.72, suggesting a potential breakout. If this momentum is sustained and buyers manage to keep the price above 2345.48, the immediate target, a continued rally towards the 2352.82 to 2360.91 range is likely. Further bullish momentum could drive the price to the major resistance at 2374.01.

Alternative Scenario:

If the bullish momentum fails and the price falls below 2339.72, sellers might target the supports at 2331.63 and the crucial level of 2318.53. A break below 2318.53 would push gold below its 100-day moving average, setting the stage for a decline towards the key support zone at 2286.79.

Market Overview and Key Levels

Resistance Levels:

  • Resistance 4: 2374.01
  • Resistance 3: 2360.91
  • Resistance 2: 2352.82
  • Resistance 1: 2345.48

Current Price (at the time of analysis): 2343.06

Support Levels:

  • Support 1: 2339.72
  • Support 2: 2331.63
  • Support 3: 2318.53
  • Support 4: 2286.79

Impactful Events:

Gold’s upward movement might be constrained by strong US economic data. Investors are closely monitoring today’s labor market report, along with PMI indices and the trade balance figures, to gauge the potential impact on the forthcoming Non-Farm Payrolls (NFP) report, which is the most significant release of the month.

Technical Indicators and Risk Warnings:

Oscillators and Risk Warnings:

  • RSI (Relative Strength Index): Neutral, indicating balanced market conditions.
  • MACD (Moving Average Convergence Divergence): Neutral, suggesting no strong momentum.
  • Moving Averages: Bullish, reflecting the current positive trend.

Conclusion:

Gold is at a critical juncture, testing the upper boundary of a symmetrical triangle pattern amidst anticipation of key US economic data. A sustained break above 2345.48 could propel gold towards higher resistance levels. Conversely, failure to maintain this breakout could see the price retreat to supports at 2331.63 and 2318.53.

Traders should pay close attention to upcoming US economic reports, particularly the labor market and PMI data, which will provide important insights into market sentiment and potential price movements.

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