We published neutral sentiments on the commodity last weak with more bent towards bearish moves by the golden commodity. Strong data release from King dollar during Non Farm Payroll pulled the gold lower towards 1800 levels and as we thought the effects of NFP were limited, this week market opening entertained the bears in gold towards its monthly lows i.e breaking 1750-1700 major levels and going all the way down to 1689. Gold was expected to fall according to our dovish signal and go lower but certain factors discussed in the previous analysis had the chances to cause a short term hurdle in gold from breaking out below 1781. From current market scenario observing the gold chart in weekly under the lens of elliot wave pattern, the golden commodity has begun its bearish impulsive wave structure and is either still in 3rd bearish impulsive wave or is about to initiate a 4th bullish reversal wave before extending any more fall.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Gold went into oversold conditions on daily time frame - landing below 30 in relative strength index while on the chart coming all the way down to its March lows i.e 1686. Gold was quick in recovering from the oversold conditions and headed back above 23.6% fibb retracement level. Same was the case in four hourly chart in terms of oversold conditions but the wave pattern here is a bit different from the case in daily where we have expectations of strong continuation of bearish trend. But the four hourly chart calls for a bullish correction and observing it under four hourly chart, we would see the commodity reversing to exponential moving average 50 i.e 1768 and 1796 with our exponential moving average 200 present. In daily we have both the aforementioned exponential moving averages present near our lower trend line/ the point of breakout i.e 1796, these levels should be considered as good sell zone.  

XAUUSD

Aug 12 2021