By August 28, gold has entered a high-level adjustment phase over the past two days, with upward momentum visibly weakening. The metal is showing signs of stagnation at elevated prices and has begun to drift lower. So, is the gold rally over? It's still too early to make that call, as this remains merely a correction. The broader trend has not yet shifted.
Federal Reserve Chair Warsh is set to deliver his first speech at the Jackson Hole Global Central Bank Symposium today. This is a major event that could determine the short-term strength or weakness of gold. Recently, gold has been oscillating in a sideways range, with bulls and bears locked in horizontal consolidation. Under this rhythm, it's essential to reduce the frequency of trades while waiting for the rhythm to synchronize. For instance, if prices recovered in the early morning hours, the key confirmation lies in the afternoon session. One condition is avoiding a significant pullback, and another is not breaking below the low touched after the morning open, as this level is often a focal point for professional investors. Either there's no pullback, or if a pullback occurs, the market weakens — which is why waiting for the afternoon is crucial.
The U.S. session's pattern of dipping and then recovering remains unchanged. Even under a weak intraday backdrop, yesterday's U.S. session still rebounded from the prior low near 4563. Reviewing the entire corrective phase, since the decline from the previous high of 4696, the market has formed a complete three-wave correction structure. The first leg down fell from 4696 to 4605, the second leg dropped from 4673 to 4582, and yesterday's third leg pulled back from 4643 to 4564. Each of these three declines has successively bottomed out, and after each test of the prior low, a corresponding strong rebound recovery followed. Following the principle that things don't happen more than three times, with the three-wave decline now complete, short-term downward momentum is largely exhausted, and the market is positioned to build a阶段性 bottom.
From a smaller time cycle perspective, this consolidation phase has lasted three trading days, and today aligns with the timing for the correction to wrap up. With both time and pattern forming a dual resonance, the probability of a rebound recovery has risen significantly. Gold pulled back from the overnight high near 4618, and after extending the decline to 4571 in early trading, it has since halted the drop and turned upward. The price has once again held above the previous low of 4563 and shown signs of a rally. A break above 4618 would become a key signal for the market to turn stronger. If that level is decisively surpassed and held, the correction will be fully complete, and the outlook for a resumption of the uptrend will become clearer.
Today's view: Maintain a long position based on the support at 4564, wait for the European session to show direction, and after the price breaks above 4618, add to longs on minor pullbacks, with targets set around 4643.
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