Gold turned massively bullish since early November, gaining around $350 until the beginning of this month, when we saw a swift reversal, which has sen
Gold turned massively bullish since early November, gaining around $350 until the beginning of this month, when we saw a swift reversal, which has sent Gold more than $200 already. So, the decline seems much stronger, indicating a trend reversal.
The reversal started in early February with a similar outside day that extended further the next day. Could we be setting up for something similar? The volatility in equities isn’t a good sign but it may come down to economic data. Later today, we get the US consumer sentiment report which is expected to show a 0.5% increase on the month, but a cool-off to 6.2% from 6.5% year-on-year.
So, official expectations are mixed for this report, although markets are sensing a larger slowdown, which would relieve further pressure for the FED to keep raising interest rates after the strong ISM services and Us employment earlier this month.
Gold Daily Chart – Sellers Pushing Below the 50 SMA
The next support indicator has been broken
The return of the US dollar has been weighing on XAU/USD, with the metal a little lower just based, heading into tomorrow’s CPI release. The 20 SMA (gray) was providing support during the uptrend, which indicates that the pace was strong, but now the reversal lower seems even stronger, after GOLD has lost around $200 in more than a week.
The 50 SMA (yellow) was acting as resistance during the decline until November, so there was a chance that it might turn into support as well, and on Friday the decline stopped right at this moving average. But yesterday, sellers pushed the price below this moving average, so it has been removed as a possible reversal point.
Now, all eyes are on the inflation report which will be released shortly, which is expected to have climbed last month. Revisions for December showed that consumer prices rose in December instead of falling as they were previously estimated, so we might see an upward surprise today as well.
XAU/USD
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