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Gold has done this only twice
Gold is correcting a short-term overbought condition.
Gold surged nearly $300/oz in less than six weeks and almost touched its all-time high. It was a logical point from which a correction could begin.
This is only the third time in Gold's history in which it corrected after reaching or approaching the previous all-time high.
In the spring of 1978, Gold rallied to within $5/oz of the previous all-time high. It rebounded 34% in the preceding six months. Gold then corrected by 12% over less than two months.
In 2009, Gold reached the 2008 all-time high of $1000/oz. It had surged some 42% in only four months. Gold then corrected by 15% in roughly two months.
In this iteration, Gold rebounded 20% in the previous six months and therefore is not as extended or as overbought as it was in 1978 and 2009.
Gold has strong support at $1920 and $1900 and the top of the breakaway gap at $1908. A test of $1908 would mark an 8% decline from the peak.
Image Source: Kitco News
I’m looking for a bullish consolidation to develop..... Read more
Gold reverses while silver stays long
Silver remains long, but another down day will trigger a reversal. With the FED reporting on Wednesday, it is anyone’s guess on how the metals will react to a .25 rate hike. Remember, most news is already price in. Based on our algorithms, we will be looking for lower prices.
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Precious metals should be owned on a physical basis with capital that is not needed tomorrow or anytime soon. Trading should be done with paper, knowing that we can trade either side without emotions. Read More
Metals facing resistance
Precious metals haven’t been spared any of the selling. Gold trades back to its initial breakout level of $1915-$1925 as of this writing. Gold found resistance at $1965 yesterday intraday. Silver followed suit and is trading lower today after encountering resistance at $25.40 yesterday, as suggested. Platinum bulls will be looking to hold the $1000 level for signs of a bottom.
With the 10-year yield over 2% this morning and dollar strength seemingly waning, equities futures are pointing to a higher open; perhaps a sign that contrarian stocks bulls are soon to be rewarded? That said: Traders should continue to be on the lookout for volatility as we head into the upcoming FOMC meeting. Read More
Gold price remains under pressure following a sharp drop in New York Fed Empire State Survey
Economic data continues to have little impact on gold prices as safe-haven demand starts to dry up. Even disappointing manufacturing data from the New York Federal Reserve has been unable to provide any bullish traction for the precious metal.
Wednesday, the regional central bank said that its Empire State manufacturing survey's general business conditions index fell to a reading of -11.3 in March, down from February’s reading of 3.1. The data was significantly weaker than expected as economists were looking for the index to rise to 6.5.
The report said that the index is at its lowest level since May 2020.
"Manufacturing activity declined in New York State for the first time since mid-2020, according to the March survey," the report said. Read More
PPI inflation rises less than expected, gold finds little traction down 2% on the day
Gold prices remain under significant selling pressure even as inflation pressure continues to rise, albeit at a slower pace than expected.
Wednesday, the U.S. Labor Department said its Producer Price Index (PPI) rose 0.8% in February following January's rise of 1.2%; the data was weaker than expected with economists forecasting an increase of 1.0%.
For the year wholesale inflation is up 10%, the report said, in line with expectations.
At the same time, core inflation, which strips out energy and food costs rose 0.2% last month, compared to a 0.8% rise in February. Economists were expecting to see a 0.6% rise. Annual core inflation rose 6.6%. Read More
What's this year's 'potential end game'? Gold price at $2,500, oil price at $50 - Bloomberg Intelligence
Could the year-end scenario be gold at $2,500 and crude oil at $50? Gold is one of the assets that could benefit the most this year, while oil is still facing prospects of crippling demand in the future, according to Bloomberg Intelligence.
"Markets may be facing an extended risk-off reversion period, which we see as essential to reduce inflation pressures. Gold stands to be a primary beneficiary, potentially along with U.S. Treasury long bonds and Bitcoin," said Bloomberg Intelligence senior commodity strategist Mike McGlone. "Gold is poised to cross the $2,000 rubicon … Potential end game for 2022 - $50 crude, $2,500 gold, recession."
Gold has been trading in a narrowing wedge pattern, and these have the habit of breaking out to the upside, McGlone pointed out.
"The 2021 range of about $1,700-$1,950 an ounce roughly matches the 50-week Bollinger bands, which are the narrowest since 2018. We see parallels to the pattern that formed a foundation of around $1,200 some four years ago and subsequent breakout above $1,400 in 2019 when the Fed started easing again. About $1,800 is a strengthening base for a potential breach of $2,000 resistance," he explained.
High inflation, surging commodities, risk-off sentiment in U.S. equities are all adding to gold's case at the moment. Read More
Gold, silver in price downdrafts amid plunging oil, deteriorating charts
Gold and silver prices are sharply lower in midday U.S. trading Tuesday. A huge drop in crude oil prices that sees Nymex futures trading back below $100 a barrel is bearish for the metals markets and the entire raw commodity sector. The near-term technical postures for gold and silver have also deteriorated significantly recently, which is inviting chart-based speculative sellers to step in. April gold futures were last down $34.60 at $1,926.20 and May Comex silver was last down $0.188 at $25.11 an ounce.
Image Source: Kitco News
Technically, April gold futures bulls have the overall near-term technical advantage but are fading fast. A V-Top reversal pattern appears to be forming on the daily bar chart and a six-week-old uptrend on the daily bar chart has been negated. Recent price action strongly suggests a market top is in place. Bulls' next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,900.00. First resistance is seen at $1,950.00 and then at today’s high of $1,956.90. First support is seen at today’s low of $1,908.60 and then at $1,900.00. Wyckoff's Market Rating: 6.0. Read More
Fed in focus: gold price gets pulled closer to $1,900, here's what to expect next
The extremely volatile commodity sector continues to weigh on gold as markets shift their focus to the Federal Reserve's expected 25 basis rate hike on Wednesday.
At one point, gold lost $50 on Tuesday as oil prices and other raw commodities tumbled. Oil fell below $100, with West Texas Intermediate crude futures and Brent down about 5% on the day and last trading at $97.39 and $101.24 per barrel, respectively.
"It seems the gold market is a victim of the abandon widespread commodity appreciation trade. Gold prices are trying to find a floor and eventually will stabilize even if oil prices continue to slide," said OANDA senior market analyst Edward Moya.
In the meantime, the U.S. equity market climbed higher on a rebound in risk sentiment, and gold was pulled closer to the $1,900 an ounce level. April Comex gold futures were last at $1,918.90, down 2.14% on the day.
"U.S. stocks are getting a boost from a trifecta of reasons: economic and political pressure grow for a Russian ceasefire, oil prices plunge, and after both a softer-than-expected PPI report and a disappointing Empire survey supports the idea that the Fed won't have to be aggressive with tightening policy over the next few meetings," Moya said on Tuesday.
The focus now is mostly on the Fed's rate decision and central bank Chair Jerome Powell's testimony on Wednesday. Read More
Gold continues its steep decline as the Federal Reserve begins FOMC meeting
As of 3:40 PM, EST gold futures basis the most active April 2022 Comex contract continues its steep decline currently down $43.50 or 2.22%, and is fixed at $1917.50. In the last two trading days, gold has declined approximately $71, trading to its lowest closing value in the last three weeks. After challenging the all-time high of $2088 last week, trading to an intraday high of approximately $2075, gold has lost over $150 from last week’s high to the current pricing.
Image Source: Kitco News
A combination of factors has resulted in gold’s dramatic selloff. Today the Federal Reserve began this month’s FOMC meeting, which will conclude tomorrow and most certainly includes the first rate hike since the onset of the pandemic in 2020. While market participants are expecting the Fed to raise rates by ¼%, it will be the Fed statement and press conference by Chairman Powell that will be closely read and listened to in order to gauge the Federal Reserve’s overall tone. Read More
Gold and silver trade marginally lower ahead of the European open
Gold has moved 0.17% lower overnight to trade at $1915/oz but is still above Tuesday's low of $1907.14/oz. Silver is also marginally lower trading at $24.83/oz. In the rest of the commodities complex, copper is 1.37% higher and spot WTI rose 3% overnight.
Risk sentiment was positive overnight as the Nikkei 225 (1.64%), ASX (1.10%), and Shanghai Composite (3.48%) all traded higher. Futures in Europe are also indicating there will be a positive cash open.
In FX markets, the biggest mover from the majors was AUD/USD. The pair rose 0.36% overnight to trade near 0.72200. In the crypto space, BTC/USD spiked up overnight and now trades just only 0.29% higher after those gains were retraced. Read More
Gold Under Pressure Ahead of Fed’s Rate Hike and Hopes of a Swift End to War in Ukraine
Gold has drifted lower to now be trading only a little above $1,900 an ounce, some way off the all-time record it was flirting with last week.
While the war in Ukraine is far from being over, with the prospect of a multi-month or even year conflict still very real, the fact both sides have been engaged in peace talks provides ground for hope.
Hope of peace is of course essential for the people of Ukraine and indeed the world but gold has slipped slightly out of favour as the acute fear at the start of Russia’s invasion and the subsequent rush to haven assets, such as gold, has receded.
Gold has come under further pressure ahead of the Federal Reserve’s monthly interest rate meeting later today, where it seems almost guaranteed that the US central bank will announce its first hike since 2018.
The measure, which is driven by a desire to try and control runaway inflation, is a reminder of the more hawkish outlook that prevailed at the start of the year, during which gold struggled to make noticeable gains. Read More
Disclaimer: These articles are provided for informational purposes only. They are not offered or intended to be used as legal, tax, investment, financial, or any other advice.
