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Will Gold Manage to Stay Above its Resistance Level?

By Przemyslaw Radomski, CFACommoditiesDec 02, 2022 11:16AM ET
www.investing.com/analysis/will-gold-manage-to-stay-above-its-resistance-level-200633068
Will Gold Manage to Stay Above its Resistance Level?
By Przemyslaw Radomski, CFA   |  Dec 02, 2022 11:16AM ET
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Gold recently corrected a large part of its previous move, but later traded above an important resistance level. Will it be able to sustain this move?

Gold Weekly Chart
Gold Weekly Chart

The above chart features gold price in terms of weekly candlesticks. As you can see, it just approached its August high.

The resistance is provided by the weekly closing prices, and since the current week ends today (Dec. 2), it’s likely that gold’s rally was just stopped or that it will be stopped today.

Gold Daily Chart
Gold Daily Chart

Gold, just like many other markets, recently corrected ~38.2% of its previous move.

Yesterday, however, gold rallied above this important resistance level. Now, the question is: will gold be able to hold this move, or will it invalidate the breakdown shortly?

The RSI just moved above 70, and it’s a classic sell signal, which had worked many times before. The weekly resistance that I wrote about earlier is an important factor as well. Not to mention another signal from the silver-to-gold link.

Gold, Silver Daily Chart
Gold, Silver Daily Chart

Chart courtesy of https://goldpriceforecast.com/

Silver moved higher to a much bigger extent than gold did in today’s pre-market trading, and while the size of both moves is not huge, it’s something that confirmed the previous indications, and it’s a bearish sign.

The reason is that the silver market is much smaller than the gold market is, and in addition to the above (and in relation to it), silver is much more popular with the investment public. The latter tends to buy close to the tops and sell close to the bottoms. Consequently, the particularly strong performance of the white metal indicates that the investment public is “buying like crazy,” and this, in turn, is a sign that a top is being formed.

The reaction (rally) to jobless claims yesterday is consistent with the preceding. Market participants are doing the opposite of what makes sense (so, it seems that it is the general public that is making the purchases). Weaker jobless claims mean the Fed has more leeway to raise interest rates, and higher real interest rates are one (the other is the USD Index) of the key fundamental drivers pointing to lower gold prices.

* * * * *

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Will Gold Manage to Stay Above its Resistance Level?
 

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Will Gold Manage to Stay Above its Resistance Level?

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Comments (5)
Jaeyoo Kim
Jaeyoo Kim Dec 04, 2022 6:56AM ET
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Sick and tired for this guy's analysis for gold! Whatever happened he has used them signs for justifying his opinion for "bearishness for gold".
Mr Doodl
Mr Doodl Dec 03, 2022 12:26PM ET
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Nothing new.
Bernd Langer
Bernd Langer Dec 02, 2022 9:17PM ET
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So for those who don’t understand the pillars of Radomski’s technical analysis, here it is: If Gold moves up it confirms it’s bearish, if Gold moves down it’s bearish full stop lol ...
Salim Ham
Salim Ham Dec 02, 2022 9:17PM ET
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hahaha
Salim Ham
Salim Ham Dec 02, 2022 9:17PM ET
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means any way it is bearish and will b bearish.....
Salim Ham
Salim Ham Dec 02, 2022 9:17PM ET
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Salim Ham will never b out of bearish dream......promise
param walia
param walia Dec 02, 2022 9:17PM ET
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He is there to make you sell your gold and particularly miners
Tom Scheuermann
Tom Scheuermann Dec 02, 2022 8:32PM ET
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this guy calls himself a technician but when gold makes a unpredicted by him, $200 move in a month, in the opposite direction, it changes nothing in his TA? HOW IS THAT POSSIBLE???? he was on the wrong side of the 2018 to 2020 gold move....if u listen to this guy I wish you good luck because he already blew up his own account between 2018 and 2020 and he'll surely do it again.
Dwain Hobbs
Dwain Hobbs Dec 02, 2022 8:32PM ET
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One minor correction He was on the wrong side since 2008 not just 2018
The king TD David
the2775kingTD Dec 02, 2022 4:53PM ET
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Thanks for sharing this with me bro
 
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