Categories: Market Overview

Gold’s retreat is not yet a reversal

The Fed’s comments led to a 3% rise in gold, but the dollar’s recovery in the second half of Thursday reduced this gain to just 0.5%. Technically, the outlook is unclear, but fundamentally, things are still on the side of the bulls. 

In early trading on Thursday, gold slipped to $2222 on thin liquidity and the triggering of stop orders, which washed short positions out of the market. Throughout the day on Thursday, a stabilisation above $2200 looked attractive for many to take money off the table.

The technical analysis so far gives a mixed picture on the daily timeframes.

On the bullish side, gold’s ability to break above previous highs confirmed the Fibonacci extension scenario to 2300 (161.8% of the rally in the last days of February) after a corrective consolidation of 76.4%. The ability to make new highs after a pause is also a bullish signal.

On the bearish side, fatigue after the rise is temporarily evident: the price update of the highs has not been confirmed by the RSI. Moreover, the index left the overbought territory (>70) in the first half of Friday’s trading.

Cautious traders may want to wait for a break above the $2155-2190 area, as the chances of further movement in the direction of the break are higher. 

In our view, gold’s failure on Thursday and the first half of Friday does not look like a reversal, as the push into the dollar in recent hours is the result of speculation that other central banks will be even softer than the Fed. This is a supportive environment for risk assets, including gold. Still, the impressive rally in gold since the second half of February and the recent surge have left the market somewhat overheated and in need of a pause.

The FxPro Analyst Team

The FxPro Analyst Team

Our team consists of financial market experts. Our dedicated professionals prepare reviews on the foreign exchange market situation, Crude Oil, Gold and Stock Indices. All the analysts are regularly published in the world leading economic media.

Share
Published by
The FxPro Analyst Team
Tags: gold

Recent Posts

The dollar has reached range limits

The US dollar has strengthened, reaching the upper boundary of its trading range. The British…

21 mins ago

Crypto: Tug-of-war at new altitude

Cryptocurrencies continued to surge, pushing the total cap to $3 trillion. Bitcoin has gained nearly…

46 mins ago

USDJPY Wave Analysis 13 November 2024

- USDJPY broke key resistance level 154.70 - Likely to rise to resistance level 157.20…

20 hours ago

USDJPY Wave Analysis 13 November 2024

- USDJPY broke key resistance level 154.70 - Likely to rise to resistance level 157.20…

20 hours ago

WTI crude Wave Analysis 13 November 2024

- WTI crude oil reversed from the multi-year support level 66.70 - Likely to rise…

21 hours ago

Japanese inflation continues to rise

Japanese inflation is rising, with corporate goods prices inflation accelerating to 3.4% y/y in October,…

24 hours ago

This website uses cookies