August 14, 2022
  • August 14, 2022

Gold Technical Analysis: USD Recovery Halts Gains

By on May 20, 2021 0

Over the past five consecutive trading sessions, the price of gold has managed to benefit strongly from the falling US dollar.

These gains of $ 1,890 per ounce are the highest in four months. The yellow metal was exposed to profit taking that pushed it towards the $ 1,862 an ounce level as the US dollar rallied after the minutes of the last US Federal Reserve meeting were announced. The price of gold stabilizes around the level of 1,870 dollars an ounce at the start of the market on Thursday. Pending investor reaction to what has been issued by the US Central Bank and what is happening in the cryptocurrency market. Global economies are reopening and dropping Corona restrictions, despite the frightening situation in India.

The minutes of the US Central Bank meeting showed that FOMC members believed that any price increases due to bottlenecks are likely to have only “temporary effects” on inflation. The minutes also say the Fed will not lower or allow interest rates to rise anytime soon.

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In the same performance of gold, silver futures fell to $ 28.025 per ounce, while copper futures fell to $ 4.5765 per pound.

Adding to the attention of forex traders, Bitcoin, the world’s largest cryptocurrency, fell almost 40% from its record highs to support below $ 30,000, hitting its lowest level since February. Cryptocurrencies fell sharply after the China Banking Union issued a warning about the risks associated with digital currencies. A statement posted on the industry association’s website said all members should “firmly refrain from conducting or participating in any business activities related to virtual currencies.”

Bitcoin’s downfall comes after longtime Bitcoin advocate Tesla recently said he would no longer accept Bitcoin as payment for his cars, mirroring his previous stance. The sale was so intense that the website of Coinbase, an online cryptocurrency broker, was temporarily halted in the morning. As a result, Coinbase shares fell 5.9%, ending 34% below their April 16 high, just two days after the initial public offering.

Overall, investors remain focused on whether the rise in US inflation is temporary or will continue. Prices of everything from gasoline to food are rising as the economy recovers from more than a year of distress. As a result, the Fed expects the rise in inflation to be temporary and tied to the economic recovery, but investors were still unsure and more cautious. The fear is that the Fed will have to withdraw from its broad support if inflation continues. This includes historically low interest rates and a monthly purchase of $ 120 billion of bonds aimed at conquering the job market and the economy.

According to the technical analysis of gold: although the dollar has rallied and the trajectory of recent gold gains has stopped, the general trend of gold is still up, and as I have said. already mentioned, the future psychological resistance of 1900 dollars will depend on the stability. the price of gold above the resistance of 1885 dollars an ounce. The bearish movement towards the support levels of 1849, 1835 and 1820 is a strong and clear threat to the current uptrend. The price of gold will be affected today by the extent of investor appetite for risk or not, as well as the reaction of the dollar to the weekly announcement of jobless claims in the United States and the reading of the Philadelphia Industrial Index.

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