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Gold: The End Of Correction Or Double Top?

By FxPro Financial Services Ltd (Alexander Kuptsikevich)CommoditiesMay 13, 2022 05:54AM ET
www.investing.com/analysis/gold-the-end-of-correction-or-double-top-200624149
Gold: The End Of Correction Or Double Top?
By FxPro Financial Services Ltd (Alexander Kuptsikevich)   |  May 13, 2022 05:54AM ET
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A sell-off in the equity market and a new wave of flight to the US dollar on Thursday provided the perfect combination to knock out gold, which slipped to $1810 in thin trading on Friday morning, falling to its lowest level since early February.

Gold daily chart.
Gold daily chart.

Right now, it’s up to gold to decide whether we see a double top formation or whether the bulls are gaining strength and liquidity ahead of a new multi-month rising momentum.

The current decline in the price makes us keep a close eye on further developments. Yesterday, gold took a sharp plunge under the 200 SMA, which is often a bearish factor for the instrument. A consolidation of the week under $1830 would reinforce that signal.

This would open the way for another roughly 25% drop into the $1350 area, the area of the 2015-2018 highs.

Gold weekly chart.
Gold weekly chart.

If we see an uptick in buyers’ in the hours and days ahead, we could say that gold is in a correction. Potentially, a reversal to the upside from these levels could signal the start of a new wave of long-term growth, the first impulse of which was in 2018-2020, followed by a prolonged wide side trend. A potential bull target, in this case, could be the $2500 area.

Gold: The End Of Correction Or Double Top?
 

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Gold: The End Of Correction Or Double Top?

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Fahry Sumarjono
Fahry Sumarjono May 13, 2022 6:50AM ET
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what $2500 area?!
 
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