Market News & Analysis
Gold drops to 4-month Lows, USD & Stocks bite
Gold continued its decline overnight sellers briefly touching 1266.44, new 4-month lows. The decline was driven by a higher USD and charging stocks. The Nasdaq and S&P 500 hitting new record highs after better than expected U.S earnings. The USD was supported by higher U.S. bond yields.
George Gero managing director at RBC Wealth Management, “Gold traders are on the sidelines because of the strength in the dollar, stock and bond markets”, “Gold is taking a back seat, waiting for something solid like inflation numbers or some political changes in the U.S.; until then, prices are expected to trade in the lower ranges.”
Traders will be looking to this week’s U.S. GDP data for indications about the strength of the world’s largest economy.
Looking below at Gold’s 12H chart we can see the current downtrend is making LHs and LLs, sellers also turned a support level into resistance, all bearish signs. Buyers made a small kick up at a previous low but current momentum could bypass that level and return to test the next lower trendline if sellers can maintain the numbers. Buyers will need to make a new HH (higher high) and HL (higher low) to start showing a change in trend.
For now, the picture remains bearish on the short to medium term.
Good trading from EightCap
Sources – CNBC
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