On analyzing the movement by the gold futures in January, I find that the yellow metal is under selling pressure amid decreasing recessionary hopes and the anticipated meeting of the Federal Reserve on Jan.30-31.
The price movement since December 28, 2023, following a peak at $2098.40, indicates a preference for bearish control, as the overall trend appears to be within a descending channel.
Until January 19, gold futures attempted to rise during this 28º decline, hitting the day’s high at $2041.90, the day’s low at $2022.54, and closing the week at $2031, resulting in the formation of an exhaustive candle.
I find that this week’s opening at the same levels, followed by increasing pressure is likely to form a confirmatory candle on Jan. 22, 2024. That is if gold finds a breakdown below the immediate support at $2010 in the daily chart, which is likely to be a signal for the bears to turn the trend with a 74º fall.
In the daily chart, the gold futures are currently trading below the 50 DMA at 2032.33. The selling pressure suggests significant bearish activity in today's trading session.
Gold seems likely to follow the trend witnessed from Sept. 9, until Oct. 6, 2023, with a steep slide at a 74º angle.
However, comments on Friday from San Francisco Fed President Daly were slightly hawkish and positive for the dollar. She said it's "premature" to think that interest rate cuts by the Fed "are around the corner" and that she needs to see more evidence that inflation is on a consistent trajectory back to 2% before easing policy.
Finally, I conclude that if the price of gold does not hold significant support at 200 DMA at $1976 before the FOMC meeting, a reversal in gold futures will likely face a selling spree below the 50 DMA in the daily chart.
Watch my attached video.
***
Disclaimer: The author of this analysis may or may not have any position in the Gold futures. Readers can take any long or short trading position at their own risk.