Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Chart Of The Day: Gold Takes Aim At $2,000 Buoyed By Technicals Plus Geopolitics

By Investing.com (Pinchas Cohen/Investing.com)CommoditiesFeb 17, 2022 09:32AM ET
www.investing.com/analysis/chart-of-the-day-gold-takes-aim-at-2000-buoyed-by-technicals-plus-geopolitics-200618201
Chart Of The Day: Gold Takes Aim At $2,000 Buoyed By Technicals Plus Geopolitics
By Investing.com (Pinchas Cohen/Investing.com)   |  Feb 17, 2022 09:32AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Finally, we can confess: Ever since the Fed pivoted to its current hawkish stance on monetary policy in November, we've been tilting bearish on gold. We posited that rapidly rising interest rates would boost the dollar, compounded by a substantial liquidity reduction.

As well, given that gold is priced in USD, and the yellow metal doesn't provide a yield, we figured traders would rotate out of gold and into the greenback.

However, the current military standoff between Russia and Ukraine along with Kyiv's western allies has added considerable luster to the precious metal with its recent upward push helping to validate and confirm its new path higher.

Gold Daily
Gold Daily

Gold had been trading within two opposing yet equally determined forces. However, bulls have taken control of the yellow metal, paving the way for gold's return to the $2,000 level.

The commodity opened higher on Wednesday yet closed lower than Tuesday's open-to-close price range. This formation is called a Bearish Engulfing pattern; it occurs when bulls decide to give it a go, but bears ultimately have the last word—accordingly, it's a bearish signal.

However, we expected this Bearish Engulfing pattern to be even stronger, considering it confirmed the top of the triangular range. The driver for the pattern's formation was the apparent easing on the Russian/Ukrainian front.

But renewed global tensions after claims Russia was pulling troops back turned out to be false helped the bulls undermine the bearish pattern. This failure of the pattern is akin to the demoralization that follows individuals or groups who are under the impression a victory had been achieved, only to then discover it was a mistake, followed by a loss.

The current breakout has also strengthened the case for a continued uptrend, after it surpassed the Nov. 16 peak.

Trading Strategies

Conservative traders should wait for the triangle to demonstrate accumulation before considering a long position.

Moderate traders would wait for a pullback to reduce exposure but not necessarily to confirm the trend's integrity.

Aggressive traders could enter a long position according to a trading plan that meets their timing, budget, and temperament. Here is a basic example:

Trade Sample – Aggressive Long Position:

  • Entry: $1,875
  • Stop-Loss: $1,850
  • Risk: $25
  • Target: $1,975
  • Reward: $100
  • Risk-Reward Ratio: 1:4
Chart Of The Day: Gold Takes Aim At $2,000 Buoyed By Technicals Plus Geopolitics
 

Related Articles

Arkadiusz Sieron
Stagflation Could Make Gold Happy By Arkadiusz Sieron - Jul 01, 2022 2

The upcoming stagflation might be less severe than in the 1970s. So is the Fed’s reaction, which could mean good news for gold. There are many terrifying statements you can...

Chart Of The Day: Gold Takes Aim At $2,000 Buoyed By Technicals Plus Geopolitics

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Feb 17, 2022 10:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Get ready for the 1960 kiss
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Feb 17, 2022 10:11AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
God takes aim at 1960
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email