FXTM information and reviews
FXTM
93%
IronFX information and reviews
IronFX
92%
Libertex information and reviews
Libertex
91%
FXCC information and reviews
FXCC
90%
Markets.com information and reviews
Markets.com
89%
FxPro information and reviews
FxPro
88%
EUR/USD
1.1720
BTC/USD
42 453.14
GBP/USD
1.3685
USD/JPY
110.7455
USD/CHF
0.9235
USD/CAD
1.2661
EUR/JPY
129.7948

Death cross drags gold down to $1630


17 February 2021

Long-term US government bond yields continue to rise. This is already having a noticeable effect on other markets, and stock indices closed Tuesday lower, retreating from record levels. However, the most worrisome shift seems to be in gold. The troy ounce was down 1.5% on Tuesday, falling under $1800 for the second time this month and continuing to trade $10 below that line, the lower bound of its trading range for the past eight months.

While those are highs by historical standards, the move lower to those levels reflects a reversal of the last two years’ up-trend. Let’s take a closer look at these signals.

Gold has shed its positions for the fifth consecutive trading session after it failed in its attempt to return above the 50- and 200-day averages. So it was an apparent failure to return to the growing trend. A separate bearish short-term signal is the sinking of the 50-day average under the 200-day average, the so-called “death cross”. Such a pattern last formed in June 2018, after which the price lost 10% in the following two months. In 2016, the decline near such a signal reached 13% and also lasted about two months.

The current wave of the gold rally started in August-September 2018 from levels near $1200 to $2075, which were reached in August 2020. The nearest target for further selling looks to be the $1734 level, a 61.8% Fibonacci retracement of the previous rising wave. This area is also notable as the price was hovering around it for two months in April-June last year.

A deeper correction, 50% of the two-year growth, would drive the price back to $1630, where it was during the extreme volatility of the markets due to the pandemic last March. A plunge into this area corresponds to the price dynamics after the previous two “death crosses”. Besides, gold often gives up to 50% of its gains before the rally resumes.

Long-term buyers may look at the current situation as a short-term fluctuation. The broader picture suggests that having given up 50% of its 2001-2011 rally, gold started a new bullish cycle in 2016 with potential targets at $3000 in the coming years.

#source

Related

Stock Futures Soft Ahead Of Powell’s Speech
Stock Futures Soft Ahead Of Powell’s Speech

Futures in the United States and Europe are trading mildly lower today. Stock traders welcoming the view that a near-term withdrawal of quantitative easing reflects...

24 Sep 2021

Stock Futures Up Ahead Of Fed Meeting
Stock Futures Up Ahead Of Fed Meeting

Futures in the United States and Europe are trading higher today, as investors focus on China’s Evergrande whirlwind, which has even overshadowed the Federal...

22 Sep 2021

Gold's sudden glow in a falling market
Gold's sudden glow in a falling market

Gold's ability to resist the general downtrend speaks to investor confidence that global central bank policies will remain soft enough to avoid triggering a global downward asset sell-off spiral...

21 Sep 2021

Forex and Cryptocurrency Forecast for September 20-24, 2021
Forex and Cryptocurrency Forecast for September 20-24, 2021

The dollar continues to strengthen, and the EUR/USD pair moves south. Starting on Monday September 13 at 1.1810, it ends the five-day run at 1.1730. The movement...

20 Sep 2021

Gold and Silver looking into the abyss
Gold and Silver looking into the abyss

Strong US data revived bets on an imminent QE rollback from the Fed, supporting the dollar and causing bond yields to rise. The news triggered a more than 2% plunge in gold prices...

17 Sep 2021

Stocks pick up some bid after textbook SP 500 bounce
Stocks pick up some bid after textbook SP 500 bounce

European stock markets were modestly higher on Thursday after a rebound in the US and another dip for Asian equities overnight. Hong Kong down 1.7%...

16 Sep 2021


Editors' Picks

OctaFX information and reviews
OctaFX
86%
HotForex information and reviews
HotForex
85%
XM information and reviews
XM
80%
FXCM information and reviews
FXCM
79%
Vantage FX information and reviews
Vantage FX
78%
Moneta Markets information and reviews
Moneta Markets
77%

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.