Gold loses its main support level
If we look at the stock market and the main US indices, we can see how, during the last few sessions, it seems that for the moment the market is willing to buy the version of the Federal Reserve in relation to inflation. For the moment this situation seems somewhat transient, although as we could see in the press conference of last June 17 by Jerome Powell, if the economic recovery continues with the current pace, the Fed would be willing to assess the possibility of starting tapering in the next meetings. However, the market consensus does not expect any announcement or reaction until after the annual symposium in Jackson Hole next August.
Last week, in our analysis of commodities, we commented that, following such words, the rumours increased in relation to a possible tapering, with gold being the big loser, after the strong rebound of the dollar before the possible change in the current monetary policy.
This strength of the dollar has endangered the upward structure that gold had been following, after confirming the formation of a triple ground in the red at the end of last March. This was where a new upward momentum began, which led it to break up the bearish channel that it had been following since its historical highs. If we look at the daily chart, we can see how, during yesterday's session, gold lost its main support level in the coincident zone of its 61.8% fibonacci retracement level and the red band.
This breakout is being confirmed during today's session and is driving gold to trade around $1,750 per ounce. After the failure in the rebound attempt during the past week, there has been a downward crossover of its moving averages of 18 and 200 sessions, thus confirming the bearish break of this support level while the MACD continues to gather strength in negative territory despite the oversold that we can observe in the stochastic indicator.
In the coming sessions, we will have to be attentive to a possible pullback of the price and see if it is able to recover and maintain the lost support levels, since a failure in this attempt could open the doors to a further correction to its next level of support at the annual lows.
Evolution in the last 5 years:
- 2020: 21.86%
- 2019: 15.45%
- 2018: -3.22%
- 2017: 12.75%
- 2016: 10.12%
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