ABSTRACT: Gold’s momentum has picked up again somewhat in the last few trading days. The precious metal has now moved significantly away from the SMA20 on a daily closing basis. This means that the interpretation of the daily chart has not changed compared to the previous week: as long as gold is above the SMA20 at the end of the day, it could continue to go up. Above all, the area at 1,995/99 US dollars could now be started.
Current gold analysis on January 28th, 2023: Chart analysis, weekly outlook, trading setups and more – for active day traders
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Gold Review: (01/23/2023 – 01/27/2023)
Gold was trading at $1,920.2 as of Monday morning. The precious metal was $2.70 above Monday morning last week’s level but $6.80 below Friday night’s weekly close. It initially went down on Monday morning. The precious metal was able to stabilize in the $1,911.2 area and format the weekly low here. Buying interest rose again on Monday evening. It rose to and above $1,940 by Tuesday noon, with the setback being immediately repurchased mid-afternoon. Weakness initially set in on Wednesday, followed by buying again in the afternoon, taking gold to around 1,948 US dollars. In the further course of trading on Thursday, practically all profits were given back. Friday was characterized by a sideways phase. The precious metal fluctuated sideways in a narrower box.
The weekly high is above the level of the previous week, as is the weekly low, so the precious metal was able to settle above the 1,900 US dollar mark. The range was roughly at the level of the last observation period. After three weeks of gains, gold ended the trading week with a small loss. It was the first week of losses this year.
On the upside, we were expecting gold to start our next target on the upside at $1,947.5 with a break above $1,946.7. This movement has set in, the start-up target has been reached and just exceeded, the setup didn’t fit with it. On the other hand, the setbacks went exactly to our next target of $1,911.2 when the price fell below $1,913.1. The setup worked perfectly here.
Gold – How could it go on:
gold resistors
- 1,932.0
- 1,958.0
- 1,977.1
- 2,077.8
Gold supports
- 1,926.8
- 1,925.6
- 1,915.3
- 1,895.7
- 1,856.1
- 1,774.8
- 1,861.0
- 1,834.0
Gold chart check – viewing in the daily / 4h chart:
DAILY
The daily chart shows that gold pushed above the SMA20 (currently at 1,895.7 US dollars) in mid-December and was subsequently able to establish it. It gradually went up from here. The momentum has picked up again somewhat in the last few trading days. The precious metal has now moved significantly away from the SMA20 on a daily closing basis. The weekly high was just below the $1,950 mark.
This means that the interpretation of the daily chart has not changed compared to the previous week: as long as gold is above the SMA20 at the end of the day, it could continue to go up. Above all, the area at 1,995/99 US dollars could now be started.
Pullbacks could extend as far as the SMA20 and would not challenge the bullish chart picture as long as gold manages to recover at this daily closing average line. If it breaks below this line and a daily close is formatted below it, further retracements could materialize into the SMA50 area (currently at $1,826.8). Just below that is the SMA200 (currently at $1,774.8), which could offer additional support.
- Classification of higher-level chart image, forecast (daily chart): bullish
Consideration in the 4h chart:
The precious metal has repeatedly fallen below the SMA20 (currently at 1,932.0 US dollars) in the last few trading days, and was able to recover again and again in the haze of the SMA50 (currently at 1,925.6 US dollars). However, it should be noted that it is always possible to recover from the SMA50, but on the other hand it does not go much beyond the SMA20.
Thus, the current chart image is to be interpreted neutrally. It will be important whether gold manages to initially stay above the SMA50 and then push back above the SMA20 and establish it. If that is the case, things could continue to improve. It could hit the start-up targets on the upside, which could be in the $1,948/51 and $1,965/67 areas.
Should pullbacks not be able to stabilize at the SMA50 and if this average line is bindingly abandoned, the chart picture would cloud over in a sustained bearish manner. Further levies are conceivable, which could expand into the area of the SMA200 (currently at $1,856.1).
- Classification short-term chart image, forecast (4 hours): bullish
Conclusion: the daily chart is to be interpreted bullishly. As long as gold is above the 20-day line at the end of the day, further recovery movements are possible and conceivable, which could go up to the 1,995/99 US dollar area.
- Probability of bull scenario based on our setup: 60%
- Probability of a bear scenario based on our setup: 40%
Gold framework conditions:
The US GDP data for the 4th quarter of 2023, which was released on Thursday of the last trading week, came in robust and in line with expectations. So far, there have been no major signs of slowing down due to the rise in interest rates. the US job market signals almost full employment, and consumption, the most important pillar of the economy, has not yet collapsed. However, some indicators show that the wind could turn in the first quarter of 2023. It is quite conceivable that price pressure could increase again, particularly due to the uncertainties in China. We therefore assume that the FED will continue to raise interest rates at the next two meetings. This could be two more rate moves of 50 basis points each.
The ECB will also continue to tighten interest rates. We do not expect interest rates to fall in 2023, rather interest rates will continue to rise until inflation has eased significantly. As a consequence, this also means that demand in the automotive industry could decrease, but private residential construction could also continue to decline. In many regions, demand for new homes has plummeted. Rising interest rates and rising costs have developed into a negative mix that we believe will last at least until mid-2024.
Gold: Assessment for the new trading week:
Long Setups: Gold may initially attempt to hold above $1,926. If successful, it could continue higher towards our next targets at $1928.1, $1930.4, $1932.0, $1934.6, $1936.5 and then $1938.4. Above $1,938.4, the precious metal could challenge our targets at 1,940.2, at 1,942.4, at 1,944.8, at 1,946.7, at 1,947.5, at 1,949.9, at 1,951.2 and then at Starting at $1,953.5. If there are no setbacks here, the upward movement could continue. Our next targets would be found at $1,955.7, at $1,958.0, at $1,960.1, at $1,962.0, at $1,963.9, at $1,965.5, and then at $1,967.8.
Short setup: If gold fails to hold above $1,926, the precious metal could target our next targets at 1,925.6, at 1,923.8, at 1,921.4, at 1,919.2, at 1,916.9, at 1,915, at 2, at $1,913.3, at $1,911.2, at $1,909.7, at $1,907.4, at $1,905.4, and then at $1,902.6. Absent any rallies here, it could continue down to our next targets at 1901.0, at 1899.7, at 1897.8, at 1895.7, at 1894.3, at 1891.2, at 1889.9 , at $1,887.8, at $1,785.2, at $1,883.2, at $1,881.0, at $1,879.8 and then at $1,877.7. Below $1,877.7, the precious metal could challenge our targets at 1,876.1, at 1,874.4, at 1,872.2, at 1,870.1, at 1,869.8, at 1,867.1, at 1,865.5 reach $1,863.3, at $1,860.5, and then at $1,858.0.
- Overarching expected trend in week 05 / 2023: sideways / upwards
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