Gold dips but still showing resilience
Yesterday gold traded over $2,724 to hit its highest level since mid-December. Back then, gold sold off over the following five sessions for an overall 5% loss. Could history repeat? It’s certainly possible. Last month’s sell-off came despite the daily MACD hovering around ‘neutral’ so there was no indication that gold was overbought. Today’s daily MACD is higher than back then. Yet it looks more constructive, as it has been gently pushing up in reaction to the steady progress that the gold price has made since hitting its December lows. Gold’s bounce and subsequent rally followed the Fed’s ‘hawkish rate hike’. And since then it has continued to push higher despite the undoubted strength of the dollar – a perfect illustration that correlations, whether negative or otherwise, don’t always hold. Gold is a touch weaker today, but it remains above $2,700 for now.
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