Fundamental Analysis

• China has resumed gold purchases, triggering risk-off sentiment due to concerns over Syrian instability.
• The Deputy Governor of the Bank of Japan is scheduled to give a speech and hold a press conference ahead of the January meeting, increasing speculation about a rate hike in January.

XAUUSD Technical Analysis

The daily chart of gold indicates a strong upward momentum as the price broke above the 28-day moving average, temporarily surpassing 2,670 USD. While resistance emerged at the Fibonacci retracement level of 23.6%, resulting in a slight pullback, the breakout from the previous range suggests a bullish outlook.

Additionally, the pattern of rising lows reinforces the possibility of continued upward movement. Key factors influencing this rise include China’s gold buying activity and geopolitical uncertainty surrounding the Syrian government’s collapse, which has intensified risk-averse behavior in the market. Moving forward, whether gold can close above 2,670 USD, corresponding to the 23.6% Fibonacci level, will be a significant indicator of its trajectory.

Day trading strategy (1 hour)

In the 1-hour chart, gold has shown a reaction at the 23.6% Fibonacci retracement level, pulling back after reaching 2,670 USD. Despite a gradual decline, the 28-hour moving average remains upward-sloping, indicating an underlying bullish trend. Buying opportunities are expected to emerge near 2,650 USD, where the price may find support.

The day trading approach involves placing buy orders around this level, with profit-taking targets set at 2,670 USD. If the price closes below the 28-hour moving average, it would signal a shift in momentum, necessitating stop-loss activation to limit potential downside risks.

Support/Resistance lines

Key support and resistance lines to consider:

• 2,676 USD: Yesterday’s high.

Market Sentiment

XAUUSD: Sell: 56% / Buy: 44%

Today’s important economic indicators

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.