Gold 
GOLD hit a record high recently on global trade tensions before pulling back following release of President Donald Trump’s tariff plans. What does fundamental and technical analysis say could be next for the precious metal?
Let’s check it out:
Gold’s Fundamental Analysis
The Atlanta Federal Reserve Bank recently revised its well-known GDPNow model for first-quarter gross domestic product to a -2.8% seasonally adjusted annual rate.
However, the bank also estimated Q1 GDP at just -0.8% when adjusted for rising U.S. gold imports vs. exports.
Wait a minute! Do you mean that the Atlanta Fed runs two GDP models -- one that includes the cross-border gold trade and one that doesn’t? Yes, I do.
U.S. gold exports have been rising because some of the world’s central banks -- most notably, China and Russia’s -- have become large net buyers of physical gold.
Both countries are members of the so-called “BRICS” -- a group of non-Group of Seven nations like Brazil, Russia, India, China and South Africa (hence the “BRICS” name).
The BRICS have often hinted at creating some kind of a monetary union that would produce a single currency to rival the U.S. dollar’s current status as the world’s “reserve” form of cash.
This new BRICS form of money could either exist alongside each country’s own national currency or actually replace them (along the lines of what happened with the European Union’s creation of the euro).
Now, EU nations participating in the single-currency zone have had to largely surrender their monetary sovereignty. That's something I really could never see China, Russia, India or Brazil being willing to do.
That said, there’s talk of the BRICS creating something like the International Monetary Fund’s Special Drawing Rights. But unlike SDRs, the BRICS would back their new currency by a hard asset like gold. That could put the U.S. dollar on the defensive.
Such a currency could become the preferred unit of trade for global commodities, or at least some global commodities between certain trading partners.
Gold’s Technical Analysis
Coupled with all of the recent global trade tensions, the central-bank purchases have created incredible demand for gold – boosting the metal’s price. Let’s the chart for check out Comex gold futuresGC1! going back to September 2022 and running through midweek last week:
Readers will see in this chart of Comex front-month gold futures (presented in the form of one continuous contract) that the metal been in a steady uptrend for more than 2-1/2 years. I’ve captured this in a Raff Regression model above.
After testing the model’s lower bound for much of late 2023/early 2024, gold recently brushed up against the model's upper trendline, then broke out.
Not surprisingly, Comex gold’s Relative Strength Index -- the gray line at the chart’s top -- is now rather strong and even close to technically overbought territory (above 70).
That’s historically where gold futures weaken briefly prior to pushing even higher. (Obviously, past performance is no guarantee of future results.)
Meanwhile, the Comex contract’s daily Moving Average Convergence Divergence index (or “MACD,” marked with gold and black lines and blue bars at the chart’s bottom) looks very bullish.
The 9-day Exponential Moving Average (or “EMA,” marked with blue bars) is above zero, as is the 12-day EMA (the black line) and 26-day EMA (the gold line). The 12-day line is also above the 26-day line. All of that is typically positive when charting a security.
Also note that this contract has been above all three of its key moving averages since testing the 21-day EMA (denoted with a green line above) on March 13.
Additionally, the contract has been solidly above both its 50-day Simple Moving Average (or “SMA,” marked with a blue line above) and its 200-day SMA (the red line) going back to mid-January.
That sort of set-up will often slow down portfolio managers who might otherwise be thinking about reducing their overall gold exposure.
(Moomoo Technologies Inc. Markets Commentator Stephen “Sarge” Guilfoyle owned gold ETF shares and physical gold at the time of writing this column.)
This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. Moomoo and its affiliates make no representation or warranty as to the article's adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo
Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third-party platform.
GOLD hit a record high recently on global trade tensions before pulling back following release of President Donald Trump’s tariff plans. What does fundamental and technical analysis say could be next for the precious metal?Let’s check it out:
Gold’s Fundamental Analysis
The Atlanta Federal Reserve Bank recently revised its well-known GDPNow model for first-quarter gross domestic product to a -2.8% seasonally adjusted annual rate.
However, the bank also estimated Q1 GDP at just -0.8% when adjusted for rising U.S. gold imports vs. exports.
Wait a minute! Do you mean that the Atlanta Fed runs two GDP models -- one that includes the cross-border gold trade and one that doesn’t? Yes, I do.
U.S. gold exports have been rising because some of the world’s central banks -- most notably, China and Russia’s -- have become large net buyers of physical gold.
Both countries are members of the so-called “BRICS” -- a group of non-Group of Seven nations like Brazil, Russia, India, China and South Africa (hence the “BRICS” name).
The BRICS have often hinted at creating some kind of a monetary union that would produce a single currency to rival the U.S. dollar’s current status as the world’s “reserve” form of cash.
This new BRICS form of money could either exist alongside each country’s own national currency or actually replace them (along the lines of what happened with the European Union’s creation of the euro).
Now, EU nations participating in the single-currency zone have had to largely surrender their monetary sovereignty. That's something I really could never see China, Russia, India or Brazil being willing to do.
That said, there’s talk of the BRICS creating something like the International Monetary Fund’s Special Drawing Rights. But unlike SDRs, the BRICS would back their new currency by a hard asset like gold. That could put the U.S. dollar on the defensive.
Such a currency could become the preferred unit of trade for global commodities, or at least some global commodities between certain trading partners.
Gold’s Technical Analysis
Coupled with all of the recent global trade tensions, the central-bank purchases have created incredible demand for gold – boosting the metal’s price. Let’s the chart for check out Comex gold futures
GC1! going back to September 2022 and running through midweek last week:Readers will see in this chart of Comex front-month gold futures (presented in the form of one continuous contract) that the metal been in a steady uptrend for more than 2-1/2 years. I’ve captured this in a Raff Regression model above.
After testing the model’s lower bound for much of late 2023/early 2024, gold recently brushed up against the model's upper trendline, then broke out.
Not surprisingly, Comex gold’s Relative Strength Index -- the gray line at the chart’s top -- is now rather strong and even close to technically overbought territory (above 70).
That’s historically where gold futures weaken briefly prior to pushing even higher. (Obviously, past performance is no guarantee of future results.)
Meanwhile, the Comex contract’s daily Moving Average Convergence Divergence index (or “MACD,” marked with gold and black lines and blue bars at the chart’s bottom) looks very bullish.
The 9-day Exponential Moving Average (or “EMA,” marked with blue bars) is above zero, as is the 12-day EMA (the black line) and 26-day EMA (the gold line). The 12-day line is also above the 26-day line. All of that is typically positive when charting a security.
Also note that this contract has been above all three of its key moving averages since testing the 21-day EMA (denoted with a green line above) on March 13.
Additionally, the contract has been solidly above both its 50-day Simple Moving Average (or “SMA,” marked with a blue line above) and its 200-day SMA (the red line) going back to mid-January.
That sort of set-up will often slow down portfolio managers who might otherwise be thinking about reducing their overall gold exposure.
(Moomoo Technologies Inc. Markets Commentator Stephen “Sarge” Guilfoyle owned gold ETF shares and physical gold at the time of writing this column.)
This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. Moomoo and its affiliates make no representation or warranty as to the article's adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo
Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third-party platform.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.