Gold »Today’s 2% rally change recent trend?

To save you time answering the question in the title: No. Or at least not yet.

As we’ve mentioned several times, the strength of the US dollar at the end of the month was one of the dominant themes of the month, with big implications for everything from indices to interest rates to commodities. Gold is possibly one of the most important causes of the recent strength of the dollar in the forex. After testing its 3-month high at $ 1,833 USD earlier in the month, the yellow metal has been consistently trading lower in a bearish channel for the past four weeks. To add insult to injury for gold bulls, the precious metal closed yesterday at its six-month low, despite lingering concerns about inflation and low / negative interest rates around the world.

Gold Daily Chart (XAU / USD)

Source: TradingView, StoneX

So what is the outlook for gold?

Well that remains to be seen, but as of this writing, the technical outlook remains pessimistic with the price of gold still trending down in its one-month descending channel and still below its moving average. 21-day EMA.

With that said, there are some emerging signs of optimism among gold buyers: the commodity is bouncing off the previous support at the $ 1730 USD area, and the RSI indicator is breaking out of its equivalent bearish channel, suggesting that pressure Push buying might be enough. for a break in the price itself.

This leaves gold at a potentially attractive trading level for bulls and bears. If prices can conclusively break above the bullish channel resistance and the 21-day EMA moving average near $ 1765 USD, this could indicate a further bullish leg towards $ 1800 USD or even previous highs at $ 1833. USD after. On the other hand, if it were not to break out of the established bearish channel despite today’s strong price action, the bears still have the upper hand and announce a retest of the $ 1,725 ​​USD level, if not multi-year lows. . around $ 1680 USD in the next few days.

By Matt Weller, CFA, CMT, » Official site

Disclaimer: The information and opinions contained in this report are provided for general information only and do not constitute an offer or solicitation regarding the purchase or sale of currency exchange contracts or CFDs. Although the information contained in this document has been taken from sources considered reliable, the author does not guarantee its accuracy or completeness, and does not assume responsibility for any direct, indirect or consequential damages that may result from the fact that someone trusts such information.

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