• 679 days Will The ECB Continue To Hike Rates?
  • 679 days Forbes: Aramco Remains Largest Company In The Middle East
  • 681 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,081 days Could Crypto Overtake Traditional Investment?
  • 1,085 days Americans Still Quitting Jobs At Record Pace
  • 1,087 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,090 days Is The Dollar Too Strong?
  • 1,091 days Big Tech Disappoints Investors on Earnings Calls
  • 1,092 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,093 days China Is Quietly Trying To Distance Itself From Russia
  • 1,094 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,097 days Crypto Investors Won Big In 2021
  • 1,098 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,099 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,101 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,101 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,104 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,105 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,105 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,107 days Are NFTs About To Take Over Gaming?
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

  1. Home
  2. Markets
  3. Other

Gold Market Update

Dollar consolidation set in last week at about the expected level, around 84 on the index. It got a bit higher, rising towards 84.80 early in the week, and dropped back intraday towards the end of the week, testing support back towards the 50-day moving average. Although it is expected to break higher again, it is not expected to get very far - not beyond the 85 - 85.50 area, where there is heavy resistance. This resistance arises from the trough that developed above this level early last year, and the falling 200-day moving average, both of which are expected to constrain further advance.

Should the dollar stage this limited advance, gold can be expected to back off towards its long-term trendline currently at about $420, and it MAY break down below this trendline. However, allowing a 3% margin for a trendline adjustment, and, given the fact that there is important support at the $400 level, we can afford to allow for the possibility that an adjusted trendline remains valid, as long as the price doesn't break below $400 on a closing basis.

Over the medium and long-term, the larger dollar downtrend is expected to reassert itself, and given that the oversold condition that existed last December has changed to an overbought condition, the downside potential is once again very considerable, which is clearly good news for gold. Should the larger dollar downtrend reassert itself, it can be expected to result in new lows - and new highs for gold. Note that it is also permissible for the dollar to push up out of its long-term downtrend line by a margin of up to 3% without invalidating it.

Conclusion: short-term dollar strength to the 85 - 85.50 area expected to be followed by renewed, and substantial, decline, resulting in limited short-term weakness in gold, that will be followed by it rising to new highs.

Given the recent weakness in gold, it should come as no surprise that the March - May period is traditionally a time of weakness for gold.

Back to homepage

Leave a comment

Leave a comment