05-12-2023 - Week update
Gold in hot week opening and now pulling back
If we were exciting by Gold to print a new ATH last Friday as per our weekly recap, what to say to this new week open!
On markets open this week, for us was still Sunday night, Gold had a strong and abnormal push to the upside printing new ATH at 2146.79 (Oanda feed) and at the same time we were seeing headlines with geopolitical tensions in Red Sea with US getting involved:
Yemen's Houthi rebels struck three commercial ships Sunday in the Red Sea, while a U.S. warship shot down three drones in self-defense during the hourslong assault
Source - ABC News
Such and together with algos adjusting to “never traded prices before” Gold made history again not only printing new ATHs but with an outstanding V&V making more than 700 pips move to the upside in less than 30m, with a single 15m candle doing more than 680 pips.
Right after and entering into Asian session, we started to see a pullback that right now already retested the 2010 mark value as per our weekly preview.
As of today, Tuesday, we already got part of the economic data expected for the week on Factory Orders, PMI and JOLTs.
As we were expected, Factory Orders came very poor at -3.6% as we have been seeing also poor economic data on overall Manufacturing, Durable Goods and Industrial Production that contributed for such bad report. Although, and looking at the charts, it hold minimum to no weight as of such poor data would have lea to Gold bulls, but sellers have been in control since ATHs. On Tuesday such bearish momentum was kept and the mixed data from good Services PMI and poor October JOLTs made Gold a bit messy on LTF but retested our 2010 price mark pullback that we expected on our weekly preview.
With such Gold pullback, Dollar got some strength and the opening week impact on Gold was not seen on currencies. Beside of such pullback on DXY, it is still respecting is bearish market structure and there are chances to see him retest the 104s previous highs before continuing to its bearish move. Such can be supported by the data we have been receiving as end of week we will have important labor data reports and high chance of price being set up for such.
Half of week still to go and we are still bullish on Gold, although we hit the 2010 important liquidity zone as we expected and we can see bounces to the upside. Although tomorrow and Thursday only have ADP and Jobless Claims report and with data exceeding the expectations we can see more volume and volatility as NFP and UER will be the major focus. With such we don’t expect to Gold dig lower than the 2000s, but a fake-out to such price the downside and going back up again is something that we are prepared to see.
Stay safe, stay adaptative and trade smart.