Gold: Longer Term Bullish

Technicals | Sep 30 2021

Bottom Line 29/09/21

Daily Trend: Down
Weekly Trend: Down
Monthly Trend: Down
Support Levels:  $1675 / $1634 / $1530 
Resistance Levels:  $1839 / $1924 /  (Dec 21 contract)

[All prices USD Comex futures]

Technical Discussion

Reasons to be bullish longer-term:
→ failed breakout back in May concerning yet price now potentially recovering
→ bullish decade long cup and handle pattern well evolved on the longer-term charts
→ support zone circa $1675 continues to create strong demand
→ bullish double bottom triggers at $1924

The is somewhat of a Gold Alert tonight. Basically, if price action is going to start moving north with conviction, right here is where it needs to begin such a journey. Bigger picture the prime larger cycle pattern continues to be the multi-year cup and handle formation. The final handle development now looks well evolved. Ideally, in fact, it completed on the 9th of August when the $1675 low locked into place, which was a wide-ranging price bar that closed out its session at$1726. So a cleanout session that looked extremely bearish on the surface, yet that clearly witnessed buyers coming out of the woodwork at these lower levels.

This second dip to retest the support zone also locked in the potential double bottom. Yet this pattern will not trigger until $1924 can be broken above with conviction. If this can be achieved then the target following such a move is up towards $2173. So doubly exciting as a move to $2173 will also trigger the larger multi-year cup and handle formation which has a target up towards $3000.

More immediately though, we have labelled the bounce off the August lows as a Wave-1. With the corrective dip potentially having locked in a Wave-2 last night. The typical Wave-2 61.8% retracement zone was looking for $1738, with price last night having tagged an intraday low of $1728 before closing right to the tick at $1738. Price is also now hugging the upper boundaries of the lowering old resistance line ideally now acting as support, with the horizontal support zone just below. So all our ducks are now lined up very nicely here. We now just need buyers to step up to the plate over the coming sessions. It’s make or break time right here.

Trading Strategy

Our pending recommendation remains in play. And that is to trade long at $1840.00 with stops TBA. We will manage the position post-trigger using a trailing stop. For the more conservative trader, the double bottom trigger will be the way to go circa $1924.00.

Re-published with permission of the publisher. www.thechartist.com.au All copyright remains with the publisher. The above views expressed are not by association FNArena's (see our disclaimer).

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