4 weeks ago, the strong slide in Gold pulled all commodities with it, bringing Crude, Copper, Platinum, you name it sharply lower. Since then, most if not all of the commodities have recovered, especially Crude Oil which has even exceeded price levels before the sell-off. Unfortunately for Gold, the rally in Crude wasn’t able to lift Gold to newer highs, neither did the improved risk appetite that pushed stocks to new historical highs. Gold remain flat after the bullish correction, and not even a surprising dovish Fed was able to spur more Gold demand.
From a technical perspective, the sell-off from 4 weeks ago continue to look strong and remains in play. The descending channel continue to reject any attempts to break back inside despite Stochastic readings pointing higher. If Channel Bottom manage to hold off bulls, we could potentially see bears quickly taking over to retest the previous swing low and perhaps beyond.
Price on the short-term chart is also bearish with a bearish Kumo twist happening just when price trades into current Kumo. Interim support around 1,472 keeps bears at bay, but with Stochastic readings suggesting a bear cycle underway, it will take a significant shift in sentiment from a bearish to a bullish for price to break higher into the Channel Bottom seen on the Weekly Chart.Moving forward, Gold price may face further headwinds as risk appetite continue to grow, possibly resulting in holders of gold liquidating their positions and pumping them into stocks which is the flavor of the month right now.
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