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September 6, 2021

This Metal Just Hit A Triple Top- Trading Gold

Frank Cabibi

9/6/2021

Gold has been making steady gains for the past several weeks starting mid August after hitting March and April lows. The USD has been struggling ever since the symposium meet-up in Jackson Hole where the Fed indicated they might start to taper this year but not raise interest rates in 2021. The pair is now up against a triple top after recently forming the third top on the 1D chart.

Our outlook

This could be perceived as either bullish or bearish from a technical standpoint, but fundamentals point towards a bullish case for gold. The pair has been performing well for various reasons like the weakening dollar sentiment in the short term while COT reports show us that long position futures contracts have increased as well as the overall liquidity in the gold market since net positions are steadily rising. Last week, gold also broke above the 200 DMA and was able to remain above it all week. I think we could be looking at a good week for the gold longs as interest and bullishness continues to go up.

Trade Setups

XAUUSD

Gold on the 1D chart is up against major resistance at what is now a triple top, a level that the metal hasn't been able to break above since June. If price rejects this level and begins to turn downward, gold is still in a good spot. Heavy support also lies a little below at the 200 DMA which is in the $1800-1810s range. If price does end up breaking above the triple top this week, we could expect to see a higher run to possibly the $1850s range where there is the first sign of clear resistance on this timeframe.

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