Equity markets climbed in Europe yesterday
Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
GOLD: back to indifference
Information is not investment advice
Defying the natural
On the daily chart, we see gold behaving in a very strange way. In December-January, when the US-China trade agreement was announced to be sealed and was finally signed, it was rising (what?). When the virus struck and went “wild” in January-February, gold barely moved a finger (again, what?). That’s not an exaggeration because the famous local high of $1,700 seems to be quite naturally on the way of the upward-marching metal since November (that I see). Therefore, the virus doesn’t seem to introduce any additional velocity for the gold price to move up quicker. More to that, it dropped to $1,450 per ounce. In defiance of all the “laws of safe havens”, it went down. But now, it is back up. The question is, to where?
Indeed, to where?
The trend marked on the chart clearly serves as “convertible” support: currently, the price is testing it as resistance. But even if it does cross it upwards, what will that mean? It will merely get into the trajectory of indifference which has been there since winter. But as it serves as resistance now, it still needs to be passed, and given the odd way gold behaves, it isn’t very likely to happen soon. Rather, gold seems to go into sideways mood along with the current level of $1,626, possibly even going down again. In the end, its’ leap from the ranges of $1,450 to $1,626 was really straight and steep, it will probably retrace now.
Don’t worry
How to interpret gold’s behavior? Unlike going fundamental with stocks, I suggest going technical with gold. The reality is that there are apparently so many factors overlapping and overwhelming the gold market that its behavior becomes almost completely sporadic and unpredictable, like a permanent shock. Probably, using oscillators and trend markers will be more helpful as fundamentals seem to affect it like hollow-point bullets: enters at one trajectory, exits somewhere else. Anyways, not to worry, $1,700 per ounce will be there eventually, and it is not too far away.
Similar
Brutal session in the equity markets yesterday
Ichimoku Kinko Hyo EUR/JPY: The EUR/JPY pair is now trading within the Kumo…
The U.S. economy added 390,000 jobs in May
Ichimoku Kinko Hyo USD/JPY: The USD/JPY pair is now trading above the Kumo…
Popular
Best Instruments to Trade This Week
This week, there are a few high-probability trade ideas I'd like to recommend to you. Trading these setups, be sure to implement a proper risk management approach.
European Currencies Ahead of the Banks' Statements
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
Will the FOMC Surprise the Markets?
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.
Choose your payment system
