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Analysis

Chart of the week – Potential short to medium-term recovery for Gold

gold

Chart of the week – Gold

Potential short to medium-term recovery for Gold

Short-term technical analysis (1 to 3 weeks)

(click to enlarge chart)

Time-stamped: 24 Jul 2022 at 11:30am SGT

Source: CMC Markets

  • The 4-month downtrend of Gold (Cash) that recorded a loss of -19% from its 8 March 2022 swing high of 2,070 to its recent low of 1,680 printed on 21 July 2022 has reached a potential key inflection zone of 1,670/1,640 which may lead to short to medium-term recovery based on integrated technical analysis (graphical, momentum, Elliot Wave/fractals)
  • Recent price actions have staged a rebound of +3.4% from its 21 July 2022 low of 1,680. Watch the 1,670 key long-term pivotal support for potential further up move towards the next resistance at 1,780 with a maximum limit at 1,810 (former support congestion zone of 15 June/29 June 2022 & the upper boundary of the medium-term descending channel from 8 March 2022 high).
  • On the other hand, a break with a daily close below 1,670 invalidates the recovery scenario for another drop towards the lower limit of the long-term pivotal support at 1,640.
  • Positive elements; the 1,670/1,640 key pivot support is defined by a confluence of elements (major ascending trendline from August 2018 low, the lower boundary of a major sideways range configuration in place since August 2020 all-time high), weekly bullish “Hammer” candlestick formed right above the 1,670/1,640 key pivotal support, bullish short-term momentum (4-hour RSI has staged a bullish breakout from its key corresponding resistance at the 47% level with a prior bullish divergence signal flashed out on 21 July 2022 at its oversold region & its current momentum reading has not reached an extreme overbought level of 79% where price actions may face the risk of a bearish reversal).


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