Gold extending the correction with Yield on #5-Month Low's

Gold's general commentary: Gold is on an interesting Technical fractal on the Hourly 4 chart, converted into a Rising Wedge which broke to the downside. The dominant pattern is a clear Channel Up since June #30 Low. However since June #30, the Daily chart’s RSI is Ascending, being on Lower High’s, which is on a Bearish divergence with the actual Spot Price-action which is on Lower High’s and Lower Low’s. I have seen the exact same sequence on July #8 - #16 fractal, where Gold was within Rectangle, engaged the aggressive decline, then started the recovery with more than #200 points. The RSI was then Descending, while the Price-action made #3 Lower Low’s on the Bottom trendline of the Channel Down, which Technically (if Gold repeat it’s cycle) could engage the decline and hit #1,700.80 psychological barrier on the aftermath (Medium-term). Configuration shows that Gold deliver #3 Lower Low’s (or Higher High’s) and then engages the aggressive takedown (or uptrend in the other case). I am expecting Gold to give #1,788.80 - #1,792.80 Higher Low, and then engage the Medium-term decline if Yields start the recovery. That suggests aswell that Gold may be pricing a Top soon (temporary or not) near the #1,824.80 Resistance zone. DX is on a recovery while equities are rising, so I believe that soon Gold will make a Higher Low run towards the Daily chart’s Support zone, unless #1,814.80 breaks first (less likely), in which case the downside potential is #1,792.80- #1,795.80.


Technical analysis: Gold made a strong Technical rebound provided by the Daily chart’s size Bearish spike. Candle is still open of course as correction on Yields are the reason behind it and #1,800.80 psychological barrier breakout condition has huge chances to be met and continue all the way towards #1,792.80. The Hourly 4 chart delivered an evident pullback formation and now is Trading on Lower High pressure point for the first time since July #13 and the current peak. However, Daily chart switched back to critically Bearish which is a good sign for Medium-term Sellers and is aiming at the #1,800.80 Technical Gap fill which is roughly near Hourly 1 chart Higher Low zone. Assuming it takes more than #1 - #3 sessions to reach this level, then this is also where the Hourly 1 chart will be so it is a good benchmark and first Medium-term Target once Gold achieves #1,820’s peak. However don't expect any significant fall / decline if Bond Yields doesn't rise aswell. On the other hand, the DX almost filled the Bullish Gap fill so any further takedown from now on should be adding Bullish pressure on Gold. Regarding Yields, personally I don’t expect current weak number state to last as Fed has to move Bond Yields upwards as Inflation may not be temporary as they state it to be (Fed's always changing tightening speculations are disastrous for Short-term on Gold, with Volatility skyrocketing with every Hourly candle). My estimations show that Yields should finish the August fractal above #1,8700%, where Gold should be below #1,752.80 Lower Low extension by then.


Fundamental analysis: Indeed, last week was full of surprises and sudden change of trends on Hourly basis as Gold was giving nothing but Low reliability signals as Resistance / Support breakouts were invalidated most of the times. As discussed, these are Fundamentally driven sessions and unusual spikes are part of it. The Price-action was and still is under extreme Hourly 4 chart Volatility fractal and on very important crossroads. The Hourly 4 should break to the downside and at the same time DX is Bullish along with the Bond Yields on #5-Month Low’s (both marginally) which is Technically Bearish for Gold, Fundamentally Bullish. Bond Yields however (which has been the benchmark for Gold lately along with the DX) keeping their solid Channel Down intact. This displays a very mixed picture for Gold and I can only approach it with breakout points, as Gold is ignoring fair Technical trend for more than #14 sessions now. This is translated into temporary minor movements, which will be overshadowed when the Trend appears and allows the Technical Trading (as it was the case on current #127 decline). As I am no longer interested in to commit on Medium-term (unless #1,800.80 psychological barrier breaks), #1,805.80 - #1,810.80 could be re-Buy area, calling for #1,824.80 and above where I will be contemplating Selling the market (Medium-term) towards #1,752.80. If #1,814.80 breaks to the upside once again, I have a sustainable Bullish reversal on the cards confirmed. Otherwise, the trend remains Neutral but with a small Selling note. Technically, Gold is Bearish, but will not pay too much attention to it, Bond Yields (Fundamental) are my main point of interest. My expectation is that the markets awaits for the U.S. opening Bell to make a move. My goal now is to get on the correct side on the trend (when that presents itself) and Trade Medium-term like I always do, to get myself out of this situation with a viable plan.


My position: As discussed above (about constant mixed picture on Gold), Gold is Technically pointing towards #1,792.80 or less, Fundamentally (with Yields on a decline), Resistance test is inevitable. As I am well known as an Technical Trader, I will approach with extreme caution ahead of this week's Fundamentals. I engaged my Selling order on #1,805.80, calling for #1,788,80 extension. I will add one more Selling order if #1,800.80 barrier breaks, to cover my last week's results. However if #1,800.80 rejects the Price-action, Gold can rise on the aftermath and I will close my Selling order near or on breakeven. If #1,800.80 breaks and #1,792.80 rejects, I will close my both Selling orders there (near #1,792.80) as Profit would be more than enough. If #1,792.80 breaks, #1,778.80 is next extension.