Gold Behavior After The Bounce

Gold prices formed a bottom at the key inflection point of $1,680 and began to rise towards the $1,800 region. The previous week was designated as the “Wait and Watch” week. As per expectations, prices settled in the $1,795-$1,775 range throughout the week. As we discussed last week, $1,790-$1,810 is the first resistance of this bounce from the inflection point. Gold prices have so far stalled at $1,795. This is a short discussion on the gold behavior after the bounce from the inflection of $1,680

The Gold Behavior

The chart below depicts the formation of an ascending broadening wedge followed by the formation of a descending broadening wedge. According to the fundamentals of these patterns, the ascending broadening wedge is a bearish price pattern with an 80% probability. On the other hand, the descending broadening wedge is a bullish price pattern with an 80% probability. Considering the most recent bull phase in gold began in 2019, $1,680 is referred to as the Key Inflection point. The significant flux must enter the market at this inflection point. Prices remain bullish as long as $1,680 holds.

Gold Behavior

Looking at the chart above, the inflection point also coincides with the breakout of the descending triangle. A re-test followed by a sharp reversal above the descending triangle indicates the presence of bullish forces. While the first resistance was met in the $1,790-$1,810 region, it is likely that the subsequent drop through $1,765 will initiate the second move. We will go into great detail in the premium article to discuss the next move in the markets.

Zoom In The Inflection Point

The chart was discussed in the premium section. The zoom in view reveals that the drop to $1,680 occurred in a matter of minutes. A quick reversal above this inflection indicates that prices are moving to the first resistance, which has already been reached. We executed a Long Trade for premium members at $1,741 and closed it at $1,789 last week, profiting $48.

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