Gold - market update - sell on 2H / entry 1282 $ & target 1269 $
Technical view
- market price broke within descending wedge and is searching for bottom/support
- RSI and MACD indicating both up movement in next trading days, at least sideways
- expect up/sideways movement to down trend line which is important to watch
- 50 and 100 day moving average going to cross 200 day moving average which is bearish indicator
- open long/short after confirmation as described in the chart
Fundamental view
History repeats itself: in February, gold had advanced into the price region, where every rally in recent years has come to an end. And also this time the precious metal has rebounded downwards and is currently fighting against a short-term top formation. The development of the US dollar exchange rate in particular is a negative factor. But there is also a glimmer of hope.
Dollar bullish burden
The performance of the US dollar remains a major driver of the gold price, as it is quoted in dollars and will become more expensive for non-dollar buyers if the US currency appreciates. The last major phase of weakness for the world's leading currency was in 2017, which gold used for a dynamic rally. Since then the dollar has appreciated against a basket of major currencies in the trend, which has burdened the precious metal. At the end of April, the US dollar index briefly rose to a new multi-year high - and it was no coincidence that gold fell to a new annual low at the same time.
Waiting for a larger impulse
Demand for gold was relatively robust in the first quarter. Central banks increased their inventories by 145 tonnes and purchases by the jewellery industry and financial investors also increased driving gold to its highest price since early 2018 in February. At the moment there is no great impulse for the precious metal to blow away its long-term price cap. This could most likely come from inflation. This has recently picked up again from a low level both in the USA and Europe as well as in China and could increase the need to hedge against price increase risks more strongly with gold again.
Conclusion on gold
Gold has once again failed in the current year against a massive resistance region, and this is likely to be closely related to the strength of the US dollar. So fa the consolidation has been at a high level but the precious metal is likely to remain on the defensive for the next time. In the medium term there is upside potential if global inflation picks up again which is currently apparent at least to some extent.
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- market price broke within descending wedge and is searching for bottom/support
- RSI and MACD indicating both up movement in next trading days, at least sideways
- expect up/sideways movement to down trend line which is important to watch
- 50 and 100 day moving average going to cross 200 day moving average which is bearish indicator
- open long/short after confirmation as described in the chart
Fundamental view
History repeats itself: in February, gold had advanced into the price region, where every rally in recent years has come to an end. And also this time the precious metal has rebounded downwards and is currently fighting against a short-term top formation. The development of the US dollar exchange rate in particular is a negative factor. But there is also a glimmer of hope.
Dollar bullish burden
The performance of the US dollar remains a major driver of the gold price, as it is quoted in dollars and will become more expensive for non-dollar buyers if the US currency appreciates. The last major phase of weakness for the world's leading currency was in 2017, which gold used for a dynamic rally. Since then the dollar has appreciated against a basket of major currencies in the trend, which has burdened the precious metal. At the end of April, the US dollar index briefly rose to a new multi-year high - and it was no coincidence that gold fell to a new annual low at the same time.
Waiting for a larger impulse
Demand for gold was relatively robust in the first quarter. Central banks increased their inventories by 145 tonnes and purchases by the jewellery industry and financial investors also increased driving gold to its highest price since early 2018 in February. At the moment there is no great impulse for the precious metal to blow away its long-term price cap. This could most likely come from inflation. This has recently picked up again from a low level both in the USA and Europe as well as in China and could increase the need to hedge against price increase risks more strongly with gold again.
Conclusion on gold
Gold has once again failed in the current year against a massive resistance region, and this is likely to be closely related to the strength of the US dollar. So fa the consolidation has been at a high level but the precious metal is likely to remain on the defensive for the next time. In the medium term there is upside potential if global inflation picks up again which is currently apparent at least to some extent.
please like & share this if you agree with me :)
Trade closed: target reached
The analyses provided are for informational purposes only and do not constitute financial advice or recommendations to buy or sell anything. The information presented is based on personal research and interpretation.
