Gold is down by 0.7% currently
Gold is essentially caught between two minds here. The price action we are seeing to start the week is reminiscent of that from two weeks ago and what we saw late last Friday.
As equities collapse, gold positions are said to be liquidated to meet margin calls and with the moves today, it is once again adding credence to that reasoning. This was exactly how gold initially behaved during the 2008-09 crisis as well.
Looking at the chart, the near-term bias remains more bullish as price keeps above both key hourly moving averages.
There is also support from the near-term trendline at around $1,655 for the time being. That may help to provide buyers with an area to lean on in the session ahead.
In the big picture, gold still looks set to shine as the fundamentals align for the commodity. Global central banks are easing monetary policy, real yields are moving to zero or negative rates, and recession risks are slowly being realised. What's not to like?
The only question is if you can brave the current volatility as the market is throwing away everything in search for cash as assets everywhere are being dumpstered.
