Gold under pressure
Precious metals just can’t catch a break at the moment. The dollar goes up, gold and silver go down. The dollar goes down, so do gold and silver. Now that could be a signal that the recent negative correlation between dollar-denominated precious metals and the dollar itself, is breaking down. If so, then investors can get back to studying the individual charts of both metals and discounting the greenback. So let’s assume that’s the case. Gold continues to hover above significant support which comes in a band of $2,000 to $2,010. The MACD on the daily chart is flat, but off recent lows. Silver’s momentum and sentiment remains negative and another break below $22 can’t be ruled out. Last week there was a report noting that central banks, in particular the People’s Bank of China, were net buyers of gold last year. This may offer some support going forward. But Chinese banks are closed next week for the Spring Festival. Could that leave gold vulnerable to selling pressure?
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