Gold 1853,78
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EURUSD 1,2128
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DJIA 34264,50
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OIL.WTI 65,405
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DAX 15454,50
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A careful reader of our newsletter will remember that we asked a similar question about a month ago. Indeed, traders’ interest in the yellow metal has declined due to the downtrend and lower volatility. And it was then, a month ago, that we advised to pay attention to gold again. What has happened in the meantime?
GOLD
Exactly what we predicted happened. Both technically and fundamentally.
Let’s start with the technical picture. The pattern on the chart is still the same, it has not changed. The moment the gold broke the upper line of the descending channel, we estimated that a new uptrend starts and the fall ended. Then a double bottom appeared on the chart and the price immediately pushed up from it. Again we noted that this was a powerful bullish signal. The price went up without stopping, breaking through the 50-day moving average at first. And now it has already approached the 200-day moving average.
And what about the fundamental point of view? The situation looks extremely absurd. All industrial commodities have risen strongly in the face of accelerating inflation. And gold, which for centuries has been considered the main anti-inflationary asset, has fallen. Naturally, this absurdity could not continue. The yellow metal has started to rise again. However, this growth does not look too strong. Therefore, the end of the new medium-term trend could be far away.
What could prevent this from happening? What is hanging over the market like a sword of Damocles. It’s not even an interest rate hike in the US, just talks on the subject. In this case gold is simply an asset which is falling, on a par with stock market equities, emerging currencies and commodity futures.
One thing remains true. At the moment there is little focus on gold. It will rise sharply once it passes the $2,000 level. Which means the yellow metal still has a lot of potential to move on the risk/reward ratio.
04.00 Retail sales in China for April
16.05 Clarida FOMC speech
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