Gold Retreats Amid Vanishing Recessionary Fear
Satendra Singh | Feb 03, 2023 16:53
In a piece I wrote on Jan. 28, I warned about growing hopes for retesting $2000 could lead to a fake breakout shortly to trap gold bulls as the retesting of $2000 seemed likely until the Federal Reserve gave its final verdict on Feb.1, 2023.
Once again, I explained the initial signs of exhaustion just before the interest rate decision on Feb. 1 in my last piece while gold futures were sustaining above 200 DMA in the 15-minute chart which was at $1938 on that day.
Finally, gold bulls hit $1975 soon after the interest rate decision and gold then started to slide on Feb. 2 as this sudden surge in gold prices attracted big bears to trigger a sell-off on Thursday and Friday, pushing gold futures below $1890.
This steep slide in gold futures indicates recessionary fear seems to be vanishing as economic data indicate further recovery is likely this year.
Undoubtedly, this weekly closing level will define the directional trend and could get further confirmation with the weekly opening levels on the first trading session of the upcoming week.
Technically speaking, in the weekly chart, gold futures could continue current exhaustion as the weekly candle for this week provides evidence for the likelihood of a steep slide in the coming weeks.
Undoubtedly, gold bears could try to test 200 DMA, currently at $1728.
In the daily chart, gold futures are trying to hold above the immediate support at $1878. Undoubtedly, a sustainable move below this could push gold futures to test $1790 -1780 levels.
I conclude if gold futures sustain below $1867, that could keep gold futures in a downtrend during the upcoming weeks amid wild price swings during this downtrend.
Get The App
Disclaimer: The author of this analysis may or may not have any position in the Gold futures. Readers can take any long or short trading position at their own risk. Involved risk in trading needs to be taken care of before creating any trading call.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.