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Gold is Forming a Rising Wedge Pattern

ByThierry Laduguie
Published 28/03/2024, 10:11
XAU/USD
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GC
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Gold prices have been on a tear, reaching record highs as investors flock to the precious metal. This surge is driven by a confluence of factors, with hopes of lower interest rates in the US playing a leading role.

The Federal Reserve's recent dovish shift has fueled market expectations for rate cuts as early as June. Lower interest rates typically make gold, a non-interest-bearing asset, more attractive compared to other investments like bonds. With potentially lower returns elsewhere, investors are turning to gold as a safe haven.

Adding fuel to the fire are growing concerns about a global recession. Europe's recent dip into recession has many worried about a similar fate for the US. Gold historically thrives during economic downturns, as its perceived stability and value retention make it a popular hedge against uncertainty.

This combination of potential rate cuts and recessionary fears is propelling gold to new highs. Whether the rally continues depends heavily on the future actions of the Fed and the trajectory of the global economy. However, one thing is clear: gold is currently basking in the spotlight as a safe haven for investors.

Wave (2) of a long term advance ended at 1810. The next move is wave (3) up in five waves [1,2,3,4,5], wave 1 is still in progress. Wave 1 is a rally in five waves [iC,iiC,iiiC,ivC,vC] and wave iC is in three waves, this suggests wave 1 will be a rising wedge. In this pattern wave iiiC is also in three waves and we have three waves [(a),(b),(c)]. Wave iiiC is probably complete, gold should pullback near 2120 to complete wave ivC. In the rising wedge pattern wave ivC overlaps wave iC. The next move is wave vC up, the target is 2250.

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