XAU/USD – Gold is on the recovery path after the downside breakout and drops to $1621.

Chart of the Week – 27^th September 2022

Chart Analysis

Gold dropped below $1660 support on Friday last week to hit the bottom at around $1620 and is now apparently on the recovery path while trading just under the Pivot on the chart at $1633. Our critical support and resistance levels on the chart have moved lower to track the latest downward move on Gold. The news about the Interest rates in the US that would continue to rise would mean more weakness for Gold. As the US dollar gets a further push higher, we might see a further drop in gold prices over the medium term. For now, the focus is on the Support turned Resistance at $1660 and any meaningful upside breakout would have to test this level. If gold drops from the mid-level resistance at $1648 then, would offer a good entry point for short positions. On the other hand, the S&P 500 continues to drop, pushing investors to invest in strengthening the dollar for higher interest rates rather than going for traditional Gold investments.

Please check the Chart Trading Insights below

• Resistance Zone: $1673 to $1690
• Key Resistance Level: $1660
• Major Pivot Point: $1633
• Key Support Level: $1623
• Support Zone: $1610 to $1590
• 200 Day SMA – Green Line
• 50 Day SMA – Red Line
• 20 Day SMA – Blue Line

Daily Chart Directional bias - 2 Weeks 

Trade Insights

XAUUSD – Chart shows viable Long Positions above the Pivot at $1633 heading towards the first target of $1648 resistance and then further test of the Key Resistance Level at $1660

Possible entry of Long Trades above the Major Pivot Point at $1633.

Potential First take profit could be at - $1648

Potential Second take profit could be at - $1660

Potential Third take profit could be at $1673

Alternatively, possible short positions if Gold manages to stay below or drops below the Pivot Level at $1633 with the target to test the Key Support Level at $1623 and then the test of the Support Zone starting from $1610.

Possible Entry for Short trades if Gold drops below the Pivot at 1633

Potential First take profit could be at - $1623

Potential Second take profit could be at - $1610

Potential Third take profit could be at - $1590