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TradeLikeAPro

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Gold dipped to $1832 on Wednesday morning, pulling back to a critical support line in the form of the 200-day moving average, losing more than 11% from the peak levels reached in early March.

Gold has been under systematic pressure for the past month and a half amid a rally in the dollar. In addition to this increase in the underlying price, gold has been losing buyers amid a jump in US government bond yields said senior analyst from FxPro Alex Kuptsikevich.


However, it is too early to talk about a break in the uptrend in gold, but only a retreat into deep defenses ahead of essential data. Most of the time, the correlation between inflation expectations and long-term bond yields governs the dynamics in gold. Weak real bond yields lead to a pull in the precious metal as investors look to protect the purchasing value of capital.

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With high interest rates and inflation control, investors prefer to earn yields in bonds by selling off gold. A significant event for the gold outlook is today’s US inflation release. The market reaction to this event could be decisive for gold in the coming days or weeks.

Consolidation below $1830 on the day would be an essential bearish signal that could rapidly decline towards $1800. Moreover, there would be an immediate question of double-top formation through 2020 and 2022 peaks as an early signal of a long-term downward trend with a potential of $1200.

If gold manages to develop a pullback from current levels, we could see a sharp increase in buying over the next few days, as we did in early February and late November. But unlike those episodes, this time, the bears might not wait for a quick reversal, and a further rally would be an important signal that gold continues to claw its way out of the prolonged correction. In this case, the nearest stops might be the levels near $1900, and further, the market might quickly target a renewal of the historic highs above $2075 before the end of the year.
 
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A sell-off in the equity market and a new wave of flight to the dollar on Thursday provided the perfect combination to knock out gold, which slipped to $1810 in thin trading on Friday morning, falling to its lowest level since early February.

Right now, it’s up to gold to decide whether we see a double top formation or whether the bulls are gaining strength and liquidity ahead of a new multi-month rising momentum. The current decline in the price makes us keep a close eye on further developments.
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Yesterday, gold took a sharp plunge under the 200 SMA, which is often a bearish factor for the instrument. A consolidation of the week under $1830 would reinforce that signal as explained by Alex Kuptsikevich, a senior analyst from FxPro.

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This would open the way for another roughly 25% drop into the $1350 area, the area of the 2015-2018 highs. If we see an uptick in buyers’ in the hours and days ahead, we could say that gold is in a correction. Potentially, a reversal to the upside from these levels could signal the start of a new wave of long-term growth, the first impulse of which was in 2018-2020, followed by a prolonged wide side trend. A potential bull target, in this case, could be the $2500 area.
 

Jatuh Cinta

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Gold has shed its position for the second day in a row, losing more than 1% during that time, and that might be just the beginning of a new downside wave, which will potentially take the price down to $1650. However, investors and traders will likely consider the potential to outweigh the risks early on.

The momentum of the ounce’s decline from April 18 to May 16 took more than $200 from the peak to the bottom and was sharp enough for the bears to need a recharge. However, at the beginning of last week, the rebound began to choke around 61.8% of the initial rally - clearly within the Fibonacci pattern.
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Yesterday Gold closed below its 200 SMA, and the debt and equity markets went back to selling. This dynamic is a significant signal that the bounce and consolidation phase ends in a victory for the dollar bulls, which increases the pressure on gold.

By Fibonacci, the final selling point, in that case, would be the 161.8% level of the initial momentum, somewhere around $1650, where the price was by the end of February 2020. That is, before the spike, the subsequent failure, and a long pandemic rally.

Such a scenario would be very nice, but several factors could prevent it from materialising. Gold has been repeatedly redeemed on dips to the $1750 area in the past year. Inflationary acceleration and geopolitics gradually raised the bar from which purchases prevailed.

There is also a $1750 mark near 61.8% from the 2018-2020 rally, and the bulls can step up the onslaught at the top defence level. If they fail to do so, there could be an absolute capitulation in gold.

The entire decline path can be broken down into several phases. Initially, the bears need to break support at $1780, the previous local lows. Next, the decline may encounter support from more principled buyers in $1740-1750. If the sellers are stronger here, gold could fall back to $1650 before the end of August.
 

Jatuh Cinta

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Gold lost 1% to $1850 on Friday, declining under pressure from the overall pull from risky assets. For short-term traders, it is also telling that this decline mostly erased the gains of the first few days of the month and prevented the rebound from turning into new upside momentum.

Gold came up against the resistance of sellers on Friday, as it did a fortnight ago, trying to move above the 61.8% Fibonacci retracement line from the highs of April near $2000 to the lows of May, below $1790.

The following potentially significant level is the $1840 area, where the 200-day moving average passes. In early June, the buyers prevented gold from getting below that line, but it makes sense to expect that the bears have entirely abandoned the idea of breaking below it.

It is also interesting that an increase in central bank buying accompanied the fall in the price of gold in April. For April, new data from the World Gold Council showed net purchases by global central banks of 19.4 tonnes after net sales in March.

Central bank purchases should not be taken as a bullish signal for the market as regulators often acted as market stabilisers by selling in the early 2000s during one of the strongest rallies. Uzbekistan (+9.4t), Turkey (+5.6t) and Kazakhstan (+5.3t) were the most substantial buyers of gold. Sales were more modest, with Germany (-0.9t) and Mexico and the Czech Republic (-0.1t each) contributing the most.

According to FxPro analyst, net purchases of gold by EMs and sales by developed economies indicate a relatively benign financial environment in the global economy. Otherwise, EMs were forced to sell gold to protect their currencies from declines.
 

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Jatuh Cinta

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Despite attempts at rebounding equity markets, moderate pressure on gold has persisted for the third consecutive trading session. This pressure is directly linked to rising long-term bond yields on US debt and several other developed countries.

Bonds and gold work like communicating vessels: rising real long-term yields draw capital to the debt markets away from gold. Over the last two years, the inverse correlation between gold and US 10-year Treasury yields has been very strong: gold prices peaked in August 2020, while yields rose from 0.5%.

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In our opinion, the potential danger for gold is a further tightening of the Fed’s tone, i.e. hints of new steps of a 75-point rate hike and a willingness to keep rates above inflation. But so far, we have seen a significant outperformance of inflation over key rates, and comments from FOMC members indicate a willingness to stop with a tightening in the 3.5-4.0% area, with no attempt to ride out inflation and a reversal to a rate cut as early as 2024. Such outlooks are keeping long-term bond yields in check and, at the same time fuelling interest in a strategy of buying gold during intense downturns.

Locally, creeping upward bond yields are working for sellers of gold. This also has a bearish signal in the form of consolidation below the 200-day moving average.

However, gold’s resilience drew attention when markets overestimated expectations of a rate hike from 50 to 75 points and multiple buying gains on dips under the 200-day moving average since December last year.
 

Jatuh Cinta

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G7’s ban on Russian gold may not stop its drop

G7 countries are discussing refusing to import gold from Russia - another attempt to limit the country’s export earnings. However, this news is more about headlines than the potential to become an actual market mover.

The price of the troy ounce rose by $12 to $1838 on Monday’s open and changed a little since. The 0.6% increase shows that commodity buyers are not so concerned about commodity shortages.

The G7 countries and most major economies in the EU have not been buying Russian gold for many months, so the announced measures will have little effect on current demand but will only document the status quo.
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As with oil, we may see a temporary and time-limited supply shock due to a change in logistics, but not a loss in the share of gold that Russia supplies to the world market. However, gold was already winning back this shock at the beginning of March.

Potentially, this is good news for mining companies outside of Russia, as the competitiveness of their products in developed markets will be further enhanced.

It is worth paying attention to how Newmont, Barrick Gold or ETF funds that include gold or silver producers will trade. If we do not see a rise in prices or a surge in volumes today, we should not expect this news to affect the market any further.

A glance at the gold chart from the tech analysis side is not bullish just yet, either. Gold is traded under the 200 SMA, and it has not been able to break out of this line for the last month and a half.

Meanwhile, the 50-day average is moving towards the 200-day, promising a death cross early next month. In the last two periods (February and August 2021), gold has lost about 7% after the occurrence of this bearish signal. It is well worth expecting that this time too, we only see a consolidation before another round of declines into the $1730 area before the end of September.
 

Jatuh Cinta

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The price of gold fell to a new nine-month low on Tuesday, at one point falling below $1725. In the region of $1720-1740, gold has been finding support in the declines of the last 15 months, and the daily charts clearly show that gold sellers have been slowing down lately.

Interestingly, gold has been living its life in the last few days, experiencing a sharp drop earlier in the month, but gaining support last week. Judging by the market dynamics, the most aggressive decline of the single currency in the previous week has supported gold buying.
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Since March, the euro gold price has already found support on several occasions at the approach of the €1700 area, an important milestone, and the area of the high in August 2020, maintaining a substantial downside potential. It would be naive to assume that buying gold now would protect capital in the event of existential problems in the Eurozone. But this assumption is difficult to confirm with history.

In 2012, gold was losing with the euro, and it only reversed upwards in the second half of the year following the recovery of the eurozone confidence.

Gold has reached the 61.8% of the 2018-2020 growth wave with accumulated local oversold. In such an environment, a short-term rebound is highly likely, which would be true if the dollar also loosens its grip.
 

Skyliu55

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Emas kebanyakannya kehilangan parti terkini pasaran kewangan, di mana selera risiko telah meningkat. Nilai auns troy telah berubah sedikit sejak Jumaat lalu, kebanyakannya berlegar dalam julat sempit $1702-1716, berhampiran paras terendah sejak April 2021.



Dari segi analisis teknikal, emas terlebih jual pada carta harian, kerana RSI telah berada di bawah paras 30 sejak dua minggu lalu. Pelupusan ini mewujudkan potensi yang mengagumkan untuk lantunan, mengikut contoh pasaran saham dan mata wang crypto, seperti yang telah kita lihat dalam beberapa hari kebelakangan ini. Menariknya, pelabur emas nampaknya terlupa tentang korelasi jangka panjang dan tidak tergesa-gesa untuk meningkatkan pembelian logam berharga mereka.
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Bagi pelabur dalam keadaan sedemikian, adalah penting untuk memahami di mana isyarat yang lebih dipercayai sekarang: adakah sikap tidak peduli emas wajar atau keyakinan pembeli saham dan mata wang crypto? Pembetulan lebih daripada 17% daripada sejarah tertinggi menjadikan emas sebagai pelaburan yang menarik pada tahap semasa. Bagaimanapun, spekulator jangka pendek mengekalkan sikap tunggu dan lihat. Emas perlu menjalani penyerahan terakhir untuk pembalikan yang jelas ke atas.



Itu boleh menjadi sentuhan purata pergerakan 200 minggu, yang kini melepasi $1652 dan hampir bertepatan dengan paras terendah anjakan semula tempatan yang ditetapkan pada awal 2021. Logik di sebalik penjual emas kini agak jelas: Bank pusat mengetatkan dasar monetari dengan mendadak, peningkatan hasil bon dan mengawal jangkaan inflasi jangka panjang.

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Walau bagaimanapun, perlu diingat juga bahawa kitaran penurunan harga emas selepas krisis kewangan global berakhir pada hari Fed menaikkan kadar buat kali pertama dalam kitaran itu. Dalam persekitaran semasa, isyarat daripada bank pusat terkemuka mengenai langkah dan tahap kadar faedah yang mereka percaya mencukupi untuk mengawal inflasi boleh memulakan kenaikan emas. Tanda-tanda minggu depan bahawa Fed sudah memikirkan di mana ia berhenti dalam kitaran kenaikan kadar semasa boleh melonggarkan cengkaman beruang pada emas dan menghentikan aliran daripadanya ke dalam bon.



Lagipun, jurubank sentral mesti sedar bahawa disebabkan beban hutang yang besar dan defisit fiskal yang kronik, ekonomi kini bersedia untuk menanggung kadar yang jauh lebih rendah daripada yang berlaku pada awal 1980-an. Dan itu membentuk persekitaran yang sangat yakin untuk logam berharga. Tidak boleh dilupakan bahawa bank pusat pasaran baru muncul kini mungkin lebih menekankan rizab emas berbanding dolar dan euro. Semua di atas bermakna pelabur emas masih belum tergesa-gesa untuk memenangi kembali riak pasaran tetapi sedang bersedia untuk pembalikan menaik yang ketara dan berterusan, yang boleh bermula dalam dua bulan akan datang.
 
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