Gold Staying in the Race

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In the third decade of January, Gold is looking quite stable; the precious metal is trading at 1560.00 USD per ounce. The instrument spent the previous week inside a narrow trading range in anticipation of global news.

Demand for Gold as an instrument for hedging risk is rather limited. However, the good point is that it at least doesn’t go down. The USA and China have signed phase one of their trade agreement but it didn’t make market players feel relieved: nothing was said about tariffs, which means that the USA still has a game-changer.

It would seem that the geopolitical environment had been smoothed because the US-Iran conflict didn’t go anywhere. However, right now investors are monitoring several different drivers simultaneously, that’s why they aren’t ready to sell “safe haven” assets, including Gold.

Gold on charts

XAU/USD, H4
XAU/USD, H4

As we can see in the H4 chart, XAU/USD continues consolidating around 1552.00; right now, it is moving upwards with the target at 1568.10 and has almost formed Divergent Triangle pattern. After reaching the above-mentioned target, the pair may start a new descending wave towards 1524.50. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving directly upwards above 0, thus implying a further growth.

XAU/USD, H1
XAU/USD, H1

In the H1 chart, XAU/USD has reached the target of the five-wave ascending structure at 1561.66 and may start a new correction to the downside to reach 1552.00. After that, the instrument may form one more ascending wave towards 1568.10. From the technical point of view, this scenario is confirmed by Stochastic Oscillator: its signal line is moving above 80, thus indicating that the price is finishing its growth. If the indicator breaks 80 to the downside, it will continue falling towards 50. If this level is also broken, the descending correction will continue.

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