TradeCityPro | Gold : World War III Rumors

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In this analysis, we’ll delve into gold's performance and its potential scenarios in light of rumors surrounding a possible World War III.

📅 Weekly Timeframe: Upward Leg After ATH Breakout
On the weekly chart, after breaking the critical resistance level of $2020, gold experienced a sharp rally with large bullish candles, climbing to $2400. Following a brief consolidation period, the rally continued, pushing gold to a resistance at $2751, where it registered a new ATH at $2790.

📊 Notably, both of these recent highs were accompanied by the RSI reaching 80.69, signifying a strong resistance level in the RSI. This level could serve as a key indicator to identify trend reversals in the future.

🚀 Overall, 2024 has been a bullish year for gold, with its price increasing by over 30% since the start of the year. Given the shallow corrections and strong weekly candles observed so far, gold now appears to be entering a corrective phase, which is natural and supportive of the ongoing bullish trend.

🔽 Should a sharp correction occur, the first short-term support in this timeframe is at $2409. However, this level isn’t highly reliable, and it would be prudent to wait for gold to establish a new price structure.

🧩 The SMA99 indicator reveals a significant gap between the price and its moving average. Since price and moving averages are often attracted to one another, this large distance suggests a heightened probability of a correction.



📅 Daily Timeframe: Corrective Phase
In the daily timeframe, after reaching resistance at $2789, gold has entered a corrective phase, forming a non-failure swing pattern. Additionally, the price reacted at $2558, which aligns with a trendline, indicating a dual level of support.

🧲 For the non-failure swing pattern to activate, the trendline must break along with the support level at $2558. If the price closes a candle below this area, the pattern will confirm, opening the door to further declines.

🔑 The next key supports are at $2472 and $2285. Considering the undeniable weakness in this timeframe and the Dow Theory bearish pattern, further corrections are likely.

🎲 Currently, the RSI is pulling back to the 50 level, while the price has returned to test the SMA25, after initially breaking below it. If the price gets rejected from the SMA25 and the RSI continues to decline, the likelihood of breaking the trendline and activating the non-failure swing pattern increases.



📅 4-Hour Timeframe: Futures Triggers
On the 4-hour chart, the price has completed its correction of the upward trend and is now attempting to resume its uptrend. Given the bullish momentum seen in the daily and weekly timeframes, if higher highs and higher lows form in this timeframe, it could signal the start of a Lower Wave Cycle (LWC). The targets for this uptrend are $2713 and $2789.

🔼 If the price continues its corrective movement, breaking and closing below the triggers at $2610 and $2558 could provide a solid entry point for bearish trades.

✅ The RSI has now reached the overbought region, suggesting a potential short-term correction before continuing the upward trend. If no correction occurs, the trend could become unhealthy, and such trends are often unsustainable.

Gold remains in focus as geopolitical uncertainty, including World War III rumors, adds to its appeal as a safe-haven asset. Keep a close eye on these levels and scenarios to plan your trades effectively.

📝 Final Thoughts

This analysis reflects our opinions and is not financial advice.

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