Gold Price Action Shows Signs of Weakening Momentum

Market Analysis – May 29

Gold price action has formed a notable double-top pattern on the daily chart. The double-top pattern traditionally signals a potential reversal or a deceleration in the prevailing bullish trend. Despite this, it is important to highlight that no significant demand zones or swing lows have been compromised, thus keeping the long-term bullish narrative in check.

Key Price Levels to Watch

Demand Levels: 2285.0, 2150.0, 1984.0
Supply Levels: 2417.0, 2500.0, 2600.0

Long-term Outlook: Bullish

The bullish trend for Gold commenced with vigor, as evidenced by the wide separation of the Williams Alligator strings between late April and early May. This separation indicated a robust upward momentum. Notably, a pattern of three white soldiers arose from a consolidation phase that began in December, catalyzing the ongoing trend. Subsequently, another formation of three white soldiers stemmed from the 2150.0 demand level, reinforcing the strength of the bullish movement.

The Williams Alligator strings have converged, suggesting a decline in momentum. This observation is in line with the emergence of the double top pattern on the daily chart, which points to potential weakness ahead. Despite this, the Williams Alligator supports the upward trajectory, even as the Stochastic oscillator indicates an oversold condition, hinting at a possible resurgence in buying pressure.

Short-term Outlook: Bearish

Shifting our focus to the 4-hour chart, we observe a short-term bearish trend. The critical demand level at 2285.0 remains unbreached, thereby preserving the integrity of the long-term bullish outlook. However, should the neckline of the double top pattern be compromised, we could witness a shift towards a bearish market dynamic. For the time being, the immediate target remains at the previous high of 2420.0.

In summary, while the long-term bullish trend for Gold is still intact, caution is warranted due to the recent indications of weakening momentum. Investors must monitor the aforementioned key levels and be prepared for potential shifts in the market sentiment.

You can purchase Lucky Block here.  Buy LBLOCK

Note: Learn2.trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results