{"id":57543,"date":"2022-08-15T09:42:27","date_gmt":"2022-08-15T13:42:27","guid":{"rendered":"https:\/\/www.ino.com\/blog\/?p=57543"},"modified":"2022-08-15T09:43:22","modified_gmt":"2022-08-15T13:43:22","slug":"gold-and-silver-is-it-a-trap","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2022\/08\/gold-and-silver-is-it-a-trap\/","title":{"rendered":"Gold And Silver: Is It A Trap?"},"content":{"rendered":"

Back in June<\/a>, I shared with you an alternative scenario<\/a> for gold with a downside trigger on the trendline support. <\/p>\n

I highlighted it with a purple color in the weekly gold futures chart below. This area is fortified with the red horizontal trendline based on the former valley of $1,678. Though, it\u2019s a double support level.<\/p>\n

\"Gold<\/a>
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Source: TradingView<\/em><\/center><\/small><\/p>\n

It is amazing how accurately the price bounced off that strong support. The metal took its chance to jump to the upside amid the falling yield of 10-year U.S. government bonds (10Y). <\/p>\n

The easing inflation data limits the hawkish expectations on the Fed rate hikes. Though, the 10Y\u2019s advance has been paused as the market took some gains amid uncertainty. <\/p>\n

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However, the real interest rate is still strongly negative at -6%. The labor market shows vitality according to statistics. This leaves the room for the Fed to keep tightening until something breaks down. <\/p>\n

The 10Y bounced off recently from 2.6% to 2.85% and nobody knows if it\u2019s a continuation or a consolidation. <\/p>\n

The gold market has been trapped with the whole uncertainty as it has built a large sideways consolidation since August 2020.<\/p>\n

As long as the gold futures price keeps both above the former valley of $1,678 and the trendline support there is a chance to see the retest of the all-time high of $2,089. <\/p>\n

For a bullish setup, the price should chart the minor correction that should not drop below the recent valley followed by the breakup of the most recent minor top as shown with the blue zigzag. <\/p>\n

The RSI is close to the neutral area and it should move above the \u201cwaterline\u201d of 50 to support a further advance of the price.<\/p>\n

Such a large consolidation could bring a hope for gold bulls for a really big gain, as size matters! The longer it takes the market to digest the uncertainty, the stronger will be the new base for a new launch of the price to the upside. <\/p>\n

Let us watch to see if the price will keep its grip above current support otherwise it would be a trap.<\/p>\n

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Do you feel hope or do you see this bounce as a trap for gold futures?<\/strong><\/p>