Focus on Whether the Key Levels Are Broken while Trading in Fluctuating Ranges

Commodity

Economic

Summary:

Gold enters 2024 under pressure from the rising USD, but is supported by expectations that the Federal Reserve will cut interest rates this year and heightened concerns about geopolitical events.

SELL XAUUSD

Close Time

CLOSED

2045.00

Entry Price

1998.00

2066.00

4624.92 +27.75 +0.60%

124.6

Pips

Profit

1998.00

2032.54

Exit Price

2045.00

Entry Price

2066.00

Fundamentals

As gold enters 2024 under pressure from the rising USD, it's hard to expect major new data or information to reshape the market on a weekly basis. The main events in focus this week are the official BRICS capital increase, the Red Sea shipping disruption, and the elections in Taiwan.

From the aspect of economic data, the release of U.S. inflation data is likely to increase volatility. Nonetheless, it still helps the market to take a more reasonable view of the Fed's policy, suggesting that the previous stance was overly optimistic.

As we have clarified the medium-term outlook for the gold market and believe that the uptrend still has good cornerstones, the increased volatility resulting from this weekend's elections in Taiwan could be of critical importance; therefore, depending on the outcome, the direction of the gold market could also change, especially if the situation escalates.

All in all, in the medium term, everything we're seeing right now is in gold's favor. So far, our advice is the same - keep buying physical gold and keep holding long positions.

Focus on Whether the Key Levels Are Broken while Trading in Fluctuating Ranges_1

Technical Analysis

Gold prices followed Monday's decline with a technical adjustment in Tuesday's trading and stabilized in positive territory above US$2030. The XAUSUSD even broke above yesterday's high of US$2,036 to reach an intraday high of US$2,041 ahead of the New York session.

From a technical perspective, any subsequent rise would need to stop below that level and form a consolidation pattern; otherwise, any further rise could break the left shoulder at US$2,048 and bring a downside reversal to the bears.

And prices above that resistance at US$2,048 could see gold prices retesting last Friday's swing highs, the US$2,063-2064 range. The next strong resistance lies in the US$2,075-2,078 range, a decisive break above which would remove any near-term negative outlook and allow the bulls to retest the integer threshold of US$2100.

On the other hand, the overnight swing low of US$2,016 now seems to protect the immediate downside of the 50-day SMA, which now sits near the US$2,012 range. Next is the key US$2,009 level and the psychological threshold of US$2,000; below that, gold could accelerate its slide toward support in the US$1,987-1,978 range until the December lows, the US$1,973-1,962 range, including the 100-day and 200-day SMAs.

Overall, we believe that the market is currently in a positive stance, which seems to be a tangible reflection of the volatility in the market ahead of Thursday's important U.S. inflation data; however, we have always believed that until prices break through important key support or resistance levels, it is still recommended to buy low and sell high.

Trading Recommendations

Trading direction: Short

Entry price: 2046

Target price: 1998

Stop loss: 2066

Deadline: 2024-01-23 23:55:00

Support: 2030, 2026, 2016, 2009

Resistance: 2042, 2046, 2052, 2066

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