Chart of the Week – 16^th September 2022

Gold - XAU/USD

Downside break for gold as prices reach the yearly bottom and drop below the longer-term support at $1680.

Chart Analysis:

With the huge drop in Gold yesterday the XAUUSD is now trading near the 2.5-year-old trough at $1660 that the pair once tested in April 2020.  The longer-term descending channel is back in the picture and has become more relevant now signifying the Downtrend in Gold. In our last analysis, we highlighted how there were possibilities for short positions on Gold and apparently Gold would continue to move south for now.  The 10-year US Treasury yield climbed to 3.46% and approached the 10-year peak of 3.5% that was hit in June this year. Now there are bets ramping up that the Fed could raise the interest rates by 100bps next week. While gold is just trading near the oversold territory on the RSI indicator and has fallen quite below the SMA Levels showing the full bearish bias of the market.

Please check the Chart Trading Insights below -

• Resistance Zone: $1730 to $1750

• Key Resistance Level: $1710
• Major Pivot Point: $1680
• Key Support Level: $1660
• Support Zone: $1640 to 1620
• 200 Day SMA – Green Line
• 50 Day SMA – Red Line
• 20 Day SMA – Blue Line

Daily Chart Directional bias - 2 Weeks 

Trade Insights – XAUUSD

The chart shows viable Short Positions under the Key Support Level at 1660 heading towards the first target of $1640 Support and then further test of Support Level at $1620.

Possible entry of Short Trades below the Key Support Level at $1660.

Potential First take profit could be at - $1640

Potential Second take profit could be at - $1610

Potential Third take profit could be at $1600

Alternatively, possible long positions if Gold manages to stay above the Key Support Level at 1660 with the target to test the Key Pivot Point at $1680 and then the test of the Key Resistance Level at $1710.

Possible Entry for Long trades above Key Support Level at $1660.

Potential First take profit could be at - $1680

Potential Second take profit could be at - $1710

Potential Third take profit could be at - $1730