Bearish "Head and Shoulders" Pattern to Keep Playing Out

Commodity

Economic

Summary:

Gold prices hit a two-week low as the strength in the US dollar and rising Treasury yields dampen gold's appeal. Several institutions remain bullish on gold, foreseeing a potential decline in the US dollar's global reserve share over the next five years.

SELL XAUUSD

Close Time

CLOSED

2327.77

Entry Price

2180.00

2369.00

4329.40 -8.77 -0.20%

21.3

Pips

Profit

2180.00

2325.64

Exit Price

2327.77

Entry Price

2369.00

Fundamentals

Gold prices fell 1% on Wednesday, reaching the lowest levels in over two weeks, weighed down by a stronger US dollar and higher Treasury yields. However, multiple financial institutions continue to express bullish sentiments toward gold, with one major factor being the expectation that global central banks will continue to increase their gold holdings.

Additionally, economic uncertainties and geopolitical tensions are also supporting upward pressure on gold prices. Notably, a survey indicates that 56% of central banks in developed economies and 64% in emerging markets believe the US dollar's share in global reserves will decrease over the next five years.

Investors are awaiting the US PCE inflation data to be released later this week.

Bearish "Head and Shoulders" Pattern to Keep Playing Out_1

Technical Analysis

Gold prices edged slightly higher and traded above $2,310 during the European session on Thursday, as short sellers took profits from yesterday's decline.

Gold prices fell below the $2,300 level yesterday, reinforcing expectations for further downward adjustment, with a short-term target of around $2,272. Should this level be breached, gold could potentially decline further towards the $2,210 range.

The EMA 50 continues to support bearish momentum. The bearish "head and shoulders" pattern remains effective at the same time, and it is crucial for prices to stay below $2,341 to achieve the expected targets. The anticipated trading range has shifted lower to resistance at $2,316 and support at $2,275. It is recommended to go short at highs as the primary strategy.

Trading Recommendations

Trading Direction: Short

Entry Price: 2339

Target Price: 2180

Stop Loss: 2369

Valid Until: 2024-07 - 12 23:55:00

Support: 2305, 2300, 2295

Resistance: 2316, 2330, 2337

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