GOLD ANALYSIS 23/02/2023

On the Hourly 4 chart, gold has been consolidating after entering the expected Neutral Rectangle zone of #1,833.80 - #1,852.80, with a potential stop and local high at #1,852.80. If resistance breaks, the upper maximum extension could reach #1,862.80, negating the short-term bearish bias. However, I don't expect the bullish extension to last long as gold is likely to experience another selling sequence and possibly another slide.

It's important to note that bond yields have found support and engaged in a spiral recovery (+1.84%), which could extend the downtrend on gold. Although DX remains neutral to bullish near higher highs, adding volatility to the gold counterbalancing the rise on yields. This gives me the impression that gold has more probabilities for a short-term downtrend than breaking above the resistance.

Gold has been contained within a parabolic decline but isolated within a neutral range for the last two consecutive sessions, which got invalidated ahead of the Asian session. The Hourly 4 chart is on a slight uptick (+0.10%) and represents a cautious fractal.

On the daily chart, gold is in a descending channel and is on its higher low decimal zone, with lower levels being a potential lower low target. All signs point to an aggressive decline and a probable configuration test at #1,800.80.

Although FOMC minutes delivered a hawkish stance, as I had anticipated, and despite the aggressive DX buy-off (+0.37%) throughout the U.S. session, gold's daily chart candle managed to close in losses below my #1,827.80 support line of utmost importance. The weekly chart's candle is not capitalizing on that, at -0.61% so far.

Assuming that bond yields still haven't found their medium-term support and Fed's aggressive tone in general boosting DX can deliver selling sustainability as gold should test the #1,800.80 benchmark and probable #1,778.80 lower lows in extension. Late week fractal should deliver what I am waiting for and optimal selling opportunity was at #1,842.80 - #1,852.80 resistance zone.

I am still holding my selling order with #1,835.80 as my entry point. The current sequence highly depends on how DX fares in the coming sessions, but regardless, My First Target is 1814 but I am expecting a #1,800.80 psychological benchmark test until the end of the week.

Syed Abdullah Shah

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+971544708771

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