On the lookout for different methods to purchase the greenback?
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As we speak I’m trying out spot gold’s month-to-month chart for long-term reversal alternatives.
Spot Gold (XAU/USD) Month-to-month Chart
Spot gold (XAU/USD) ended August within the purple, which signifies that the commodity simply registered its FIFTH consecutive month-to-month decline.
That’s the longest shedding streak for the commodity in 4 years!
We don’t have far to search for the wrongdoer.
Whereas post-pandemic world development issues and Europe’s power disaster are driving investments into safe-haven gold, the prospect of upper rates of interest within the U.S. is pushing merchants into shopping for much more USD.
Because of the Fed’s hawkish charge hike schedule, the greenback is outperforming gold as a safe-haven…for now.
XAU/USD turned decrease from the $2,000 psychological space and is now buying and selling nearer to the $1,700 ranges.
As you possibly can see, $1,700 strains up with the “neckline” of the Double High sample on the month-to-month timeframe.
Will we see a draw back breakout this month?
August’s candlestick is fairly bearish so I wouldn’t rule it out. A transparent break under $1,700 opens XAU/USD to a transfer right down to $1,550 if not the $1,400 resistance degree seen in 2014 to 2018.
However what if $1,700 holds as assist?
If XAU/USD remains to be above the $1,700 neckline by the point the markets have priced in the remainder of the Fed’s rate of interest will increase, then we may see XAU bounce again to $1,800 or $2,000.
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