Gold dives to the next support target.
What wins? “Dollar higher. Gold down” or “Geopolitical tension. Gold up”
The dollar higher. Gold down story is more the focus or so it seems. The tension in Ukraine. The tension in Gaza. Yes it had some impact from time to time, but most rallies have been sold as traders have become immune to the “buy gold on geopolitical concerns”
Last week, the price peaked against the 100 day MA (blue line in the chart above) and traders seemed anxious to sell against the key technical level (see blue line in the chart above). Today, the next shoe dropped on the fall below the 50% of the move up from the end of December low to the March high (at 1287.19), and also the 200 day MA (green line in the chart above at 1285.54). That was a technical catalyst and the momentum has not really slowed.
Currently we are testing the 61.8% of the same move higher and the bottom trendline. So there are a couple of reasons to stick a toe in the water but as always, a move below the 1261.80 area and that is all I have to see as the trend is always respected.
Looking at the 5 minute chart (see chart below), the price has stepped down in an orderly, trend like fashion with corrections of the legs lower being limited. The last leg down, saw the price bounce off a parallel trendline (at 3 on the lower trend line). The correction off of that low has seen the price move above the 38.2-50% of that last trend leg down (see yellow area in the chart). This suggests a more balanced market at the lows (remember this is also near support from the daily chart as well).
Of course, there are higher lows but lower highs as well so it is premature to call a bottom, but there does to be some position squaring after the trend move lower and the low does have some significance. Watch that level though. A break and there could be another scoot to the downside.
Gold 5 minute chart showing a little slowing but still more to prove.
