Gold No Longer Glittering
Today’s Spotlight Market
Most traders are aware that the Gold market has been on a wild and volatile ride over the past ten years. Gold was on a tear to the upside from 2005 until peaking in late 2011 during the height of the US debt downgrade, debt ceiling debates, and European sovereign debt crisis. Although there have been periods of choppy trading since late 2011, the bears seem to be currently in control as economic news has contributed to put downward pressure on Gold prices.
Fundamentals
Gold prices are near a 2.5 month low as the US non-farm payrolls came in with a robust figure of 280,000 jobs added. This will only increase speculation among Fed watchers that a rate increase is likely in late 2015. Gold prices and interest rates tend to be negatively correlated, so an increase in US interest rates would mean lower gold prices. Gold bulls aren?t getting any support from the ongoing Greek debt default headlines, a sharp contrast to just a few years ago. The constant barrage of Greek Euro exit or default news seems to have numbed traders, rather than cause an immediate rush into Gold.
Technical Notes? -? View Today’s Chart
Turning to the 6 month continuation chart, we see Gold possibly forming a double bottom near the 1150 support line. Chartists will be watching to see if gold breaks below that 1150 line, which could signal even further bearish pressure. August Gold is trading below both the 20 and 50 day Simple Moving Averages, another bearish sign. Resistance is found around 1225, which has been tested twice since April, with both rallies failing to break through that level. RSI is at 36.8, a neutral to slightly bearish indicator.
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