GOLD → Huge imbalance. Updating the highs. What to expect?

2023年12月3日

XAUUSD is making another rally and updating the global high to 2075.4, but at the same time there is a huge imbalance in the market. Distributive retest of the resistance zone and several preconditions allow me to think about a possible correction.



In the coming week we will encounter several important news that will determine the market mood and possible medium-term prospects for trading.
It is worth paying attention to the following news:

• SP PMI, ISM PMI (Bullish expectations)
  
• ADP NonFarm (Bullish expectations)
  
• Initial Jobless Claims (Bearish expectations)
  
• NonFarm Payrolls, Unemployment Rate (Bullish Expectations)
  

The bigger reaction is the unexpected nuances regarding the expected data. Since it is news, it is impossible to know in advance what will happen in the market.
In the Middle East we notice the aggravation of the situation, but globally the situation does not change, and in addition, the DXY and XAUUSD have not paid much attention to it lately.
Increased interest in the gold market is connected with the general world crisis + decrease of dollar indices.



Gold in the distribution phase is testing the strong level of 2069.8, the price closing above the resistance level, it may be another trap before further decline. After this maneuver, another pool of liquidity was formed to continue the growth, which only increases the imbalance of forces in the direction of buyers since the strong rally of gold (the rally began in early November due to the conflict in the Middle East).



The chart more clearly shows the liquidity and disalignment zones. Market managers cannot allow further rallies in such a critical situation as they may lose money in the moment.
Reasons why I expect a false breakdown and further decline:

1. Strong distribution continues for a month. this maneuver has wasted all the potential, which, from a technical point of view, will not be enough to break through the 2070 area.
   
2. Huge imbalance on the buyers' side
   
3. Relative decline in volume on a false breakout
   
4. Death Cross
   
5. Positive DXY Fundamental
   

Expectation from the open:
The market may test 2069-2070 resistance on Monday and try to form a local bullish momentum and make a new high, but a false breakout may follow in the mid term. Consolidation or retest of 2069-2070 level from below may confirm the market's intention, which will start the final decline of the asset towards the mentioned zones.

Regards R. Linda!

2023年12月4日

注释

Huge momentum and lack of volume.
On the back of the hyped up rally from last week, distribution reaches a new high followed by a huge selloff.

Once again: The important level is 2069.8.
If price enters the area below this level, panic and strong momentum may set in