Already easing an hour before US Jobs data Friday, Gold may have defined a medium term high with the SHS break out from Friday as the premise for its move to historic levels may be over. Note that Gold has rallied from the 1600 levels in September 2022 largely as a hedge to inflation and Central Bank demand. Since then the tight monetary environment has seen record inflation metrics ease to near the long term targets and while rate cuts are technically bullish for the asset, the Fed is likely to keep rates where they are for some time bucking the trend among policy makers.
Resistance
- 2387.70 – Right Shoulder
- 2353.16 – Intraday Highs/Low
- 2314.10 – Intrday Lows/High
Support
- 2286.76 – Friday’s Low
- 2272.12 – 38.2 Fib Retracement for 2/14 Rally
- 2249.46 – Intraday Consolidation Floor
XAUUSD saw a slow start for the week bouncing off Friday’s lows on position squaring following the sharp drop. For now Friday’s sell-off managed to trigger a head and shoulder pattern with the pattern target all the way down at the 2150s. For now we are overbought in the 4H stochastic and consolidating tightly in the hourly charts. A bearish engulfing breakout to us would be an excuse to short for a test of Friday’s lows break of which opens the way towards the pattern objective.
