Gold had a big correction from the 2075 top, now testing the key level, 1920. As FOMC closing in, treasury yields started to rise again which is the two major reasons for the Ukraine war move’s correction. If FED will talk slightly dovish on Wednesday, gold may step up again but a surprise 50 basis points rate hike might be catastrophic for the bullion.
After the 2011 and 2020 tops, gold made more horizontal formations before falling more. In 2011 it was a big flat zone, in 2021 it was a declining triangle formation. After the downside breakout of these formations, a downtrend started. Gold may repeat that and just like 2020 top, 1920 is a possible dip for that formation. But lots of unknowns still exist. A hawkish FED might crash the gold towards major long-term moving averages which gold deviated a lot from (z-score form 233 still above 2 standard deviation) while stagflation and conflict risks might fuel the gold for higher tops than 2075. Gold traders should be ready for high volatility to persist for a while.
