Yellow gold prices dropped as much as 1.5% on Tuesday, ending a five-session streak as the dollar strengthened and strong corporate earnings boosted appetite for risky assets. At the time of writing, spot gold fell 0.35% to $1,786.8, while US gold futures for December delivery were down 0.28% at $1,788.4.
“ Some gold traders are able to sell profits in the recent upside moveir”
“The stronger-than-expected move in big gains in the stocks has eroded gold slightly this morning,” said Bob Haberkorn, senior market strategist at RJO Futures. Strong results from tech-related companies pushed the S&P 500 index to a record high during the session, making safe-haven gold shine. In addition, the dollar index rose 0.1%, reducing bullion’s appeal for investors in other currencies.
Bob Haberkorn says that with the stockdollar series strong, some gold traders may sell profits in the recent upside move. Cryptocoin. com
As we reported , gold prices rose nearly 2.5% in the last five sessions, supported by yellow inflation concerns and uncertainty about what action central banks will take to counter rising prices. Analisdollarser predicts that the price of gold will not deviate too much from the key technical level of $ 1,800, given the focus on inflation.
This week’s focus will be on major central bank meetings, including the Bank of Japan and European Central Bank meetings scheduled for Thursday. The Federal Reserve’s policy meeting is scheduled for next week. On the technical front, a move below $1,780 would be really bad for gold, which has been in an uptrend for the month, OANDA analyst Craig Erlam said in a note.
According to Christopher Lewis, $1,835 is a key resistance
Market analyst Christopher Lewis says that gold markets fell a bit during Tuesday’s trading session as it saw the top of the range being tested, at this point, it’s not quite ready to go higher, so some pullback seems logical. If the gold price breaks below the 50-day EMA, it will likely move further towards the $1,750 level, at which point a slight pullback is likely as the market looks like it has been overdone.
On the other hand, if it turns to a break above the upper level of the range in the past few days, it could open the possibility of a move towards the $1,835 level.
This is an area that will obviously be important, as there is significant resistance. Ultimately, if it breaks there, then it will change the general attitude of gold and send it much higher.
However, the analyst finds this highly unlikely and therefore believes that this market will experience plenty of hesitation between both situations. Christopher Lewis continues his analysis as follows:
In fact, the candlestick in the Tuesday session is a kind of “warning shot from the pawn” for buyers. It takes little imagination to see this as an area of Miss consolidation between $1,813 and $1,780. Not much has changed as long as we’ve been in this area, but if we go outside of that range, it tells us which way to go.