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Analysis

Chart of the week – Gold may shape another medium-term impulsive up move

gold

Chart of the week – Gold

Gold may shape another medium-term impulsive up move

Short-term technical analysis

Time stamped: 27 Mar 2022 at 12:00pm SGT (click to enlarge chart)

Source: CMC Markets

  • In our prior “Chart of the week update” report on Gold (cash) dated on 25 February 2022, the price actions of Gold have staged the expected rally from its minor 1,877 swing low area printed on 25 February 2022 and hit the resistance/target of 2,000/2,016 (a daily close of 2,016 was recorded on 8 March 2022).
  • Thereafter, it has continued to extend its up move to hit a fresh 52-week high of 2,070 on 9 March 2022, just a whisker away from its all-time high of 2,075 printed in August 2020 (see weekly chart).
  • The recent 2-week of -8.5% corrective decline from 9 March 2022 high to 17 March 2022 low of 1,895 has started to stabilise as price actions have traded in a series of “higher highs & higher lows” and reintegrated back above the 50-period moving average now acting as an intermediate support at 1,940 (see 4-hour chart).
  • The recent bounce of +3.8% from its 17 March 2022 low has occurred at a confluence of elements: the lower boundary the medium-term ascending channel from 28 January 2022 and the 50% Fibonacci retracement of the up move from 16 December 2021 low to 9 March 2022 high.
  • In addition, short-term upside momentum has turned constructive as the 4-hour RSI oscillator has continued to hover above a key corresponding support at the 51% since 24 March 2022 and it is still not considered “overstretched” as it has not reached an extreme overbought level of 79%.
  • Watch the 1,910 key medium-term pivotal support and a break above 1,975 is likely to see a further potential rally towards the next resistance zone of 2,000/2,0007 (minor swing high of 10 March 2022 & 1.618 Fibonacci expansion of the recent up move from 17 March 2022 low to 17 March 2022 high projected from 22 March 2022 low) in the first step.
  • However, a break with a 4-hour close below 1,910 negates the bullish tone for a deeper corrective decline towards the next support at 1,850 (the former swing high of 26 January 2022 & the former major descending trendline resistance from 9 November 2020).


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