Indeed! If you look at the daily chart of the gold metal below, few people would want to trade it, either way. Investors are also becoming less and less interested in gold. The fall has been going on for 7 months now, after hitting highs above $2000 in August 2021.
In the meantime, there may soon be a lot of interesting things waiting for us. Let’s start with the basics. When does gold rise? Many will say that gold rises during a crisis. And they would be wrong. If you look at the chart, you can see that in all of the last crises (the worst one was in 2008), the gold metal went down with the stock markets.
In fact, gold has mainly risen in 2 cases: money printing by central banks and/or rising inflation.
On throwing huge amounts of new money into the market, the gold metal made all-time highs last year.
But why has it been falling in recent months? Three main reasons can be identified:
2.Investor capital flowing into bitcoin
3.Rising interest rates
There seems to be a negative connotation on all sides. But we are forgetting the second ingredient leading to the rise of the gold metal – inflation. That is inflation, which is accelerating rapidly, not only in the US, but all over the world. Money is starting to depreciate in the real sense of the word.
How long will it last? No one knows the timing. However, sooner or later, investors will realise that cheaper gold is once again a great asset to protect them against inflation.
A strong signal from a technical point of view is likely to be a long green candle on the chart, showing the start of a new trend. But, if you look closely at the chart above, something can be seen right now. The yellow metal broke through the strong downward channel it has been in since early 2021.
No one has paid any attention to this so far. But we are paying attention to our subscribers.
08.00 UK retail sales for February
13.30 US Personal Income for February
13.30 US Personal Spending in February
15.00 US Consumer Confidence Index for March University of Michigan
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