Baxia Markets
January 23, 2024

Gold's Coiled Spring: Will the Symmetrical Triangle Spring a Surprise?

market analysis header image

Amidst the market's ebb and flow, Gold (XAUUSD), in a 4-hour dance, reveals an intriguing narrative of consolidation and potential breakout. Here's a closer look at the key elements shaping the current gold landscape.


In the heart of the gold market, XAUUSD has been treading a sideways path for the past 8 weeks on the 4-hour chart, manifesting a symmetrical triangle chart pattern. This consolidation reflects a market in transition, gathering energy like a coiled spring, hinting at an imminent bullish continuation.

Gold's Coiled Spring: Will the Symmetrical Triangle Spring a Surprise?

A crucial technical indicator, the Exponential Moving Averages (EMAs) 50 and 200, adds a layer of complexity to the narrative. The impending crossover of these moving averages looms large, a phenomenon that could signal a bearish reversal. However, the true litmus test lies in the symmetrical triangle chart pattern. A decisive break below this geometric formation may confirm the bearish reversal hinted at by the EMAs.


Zooming in on oscillators, both the Relative Strength Index (RSI) and Stochastic present a bearish tale. The RSI, having descended below the 40% mark last week, has remained in bearish territory below 60%, suggesting persistent downward momentum. This alignment with the Stochastic indicator, signaling a bearish stance, underscores the current bearish sentiment in the gold market.


Key Takeaways:

  1. Sideways Ballet: XAUUSD navigates an 8-week sideways journey, creating a symmetrical triangle pattern.

  2. EMAs on the Horizon: EMA 50 and 200 stand at the brink of a crossover, a potential precursor to a bearish reversal.

  3. Symmetry's Crucial Role: The fate of gold hinges on the symmetrical triangle pattern – a break below could confirm a shift in market sentiment.

  4. RSI and Stochastic Harmony: Both oscillators, RSI and Stochastic, harmonize in a bearish tune, reinforcing the downward momentum.

  5. Awaiting the Explosion: Traders stand on the edge, anticipating the symmetrical triangle's resolution and the potential for a burst of bullish energy in XAUUSD.

Key Economic Releases to Watch Today

CAD, New Housing Price Index (MoM) (Dec)

Forecast 0.0% vs Previous -0.2%

News Article CTA - Trading with Baxia Markets 2024

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. 

Nothing contained in this website should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.

Subscribe by Email