Gold is starting to move lower as the US dollar gains strength in this move. Bad news coming from Ukraine and hawkish Fed speakers are causing a flight back into the greenback.
The yellow metal is reacting to fresh hopes that the Fed will continue to hike interest rate hikes. The expectation that the Fed has scope to hike rates for longer has increased this week.
Technically, gold is starting to roll over on the lower time frames A move back towards gold 200-day moving average is on the cards, around $1,760. It is imperative that the yellow metals continue to make traction above this key technical metric this month
The notion that non-yielding gold is going to be less attractive due to an increased period of rates at elevated levels could cause some more technical damage for gold below $1,800 if next week’s CPI release is high.
I would suggest keeping a close eye on gold’s 200-Day SMA. This could be the area to start to accumulate gold if a much-deeper price correction happens over the next few days.
Current sentiment metric towards gold shows that sentiment has become slightly more bullish, which hints that retail are leaning against this current price correction.
The ActivTrader market sentiment tool shows that 60 percent of traders are bullish towards gold. Going forward, we really need to see a strong negative bias by retail to help the chances of a sustained recovery.
Gold short-term Technical Analysis
According to technical analysis, the price of gold could be about to move lower after breaking under its 200-period and 50-period moving average.
It is also noteworthy that a negative force is close to happening, with the 50-period crossing under the 200-period, which would create another strong sell signal for gold.
See real-time quotes provided by our partner.
Gold Medium-term Technical Analysis
The daily chart shows that the yellow metal has moved back inside its two-year range and more importantly could test back towards its 200-day moving average after moving below its 50-period moving average.
We could see the price of gold revisit the $1,1760 level, which is the location of the 200-day. Overall, it could be a strong spot to accumulate gold.
See real-time quotes provided by our partner.
