Gold posted its first weekly loss in a month on 4 April as the American job report came in much stronger than expected amid the backdrop of general fear in markets after the start of the new phase of the trade war. Usually the yellow metal has a degree of inverse correlation with major indices, but in the current situation of an ongoing crash for the S&P 500 and others, general panic can cause most investors to run for the door initially. Broadly, there doesn’t seem to be a fundamental justification for gold to decline significantly, since economic headwinds should drive the Fed to be more dovish.
The price is in the process of testing the 161.8% monthly Fibonacci extension. If successful, the next significant support would probably be $3,000, followed by February’s highs around $2,950. The large spike in buying volume during 3 May’s decline and the long tail that day might make an extended correction unfavourable, but some consolidation lower might be necessary before another round of gains given how strong the overbought signal had been late last month.
In this situation, it’s potentially very risky both to try to ‘catch the knife’ and to go with the apparent flow and sell. The next major data due is American inflation on 10 April, which might give more useful information to work with than headlines.
This is my personal opinion, not the opinion of Exness. This is not a recommendation to trade.
The price is in the process of testing the 161.8% monthly Fibonacci extension. If successful, the next significant support would probably be $3,000, followed by February’s highs around $2,950. The large spike in buying volume during 3 May’s decline and the long tail that day might make an extended correction unfavourable, but some consolidation lower might be necessary before another round of gains given how strong the overbought signal had been late last month.
In this situation, it’s potentially very risky both to try to ‘catch the knife’ and to go with the apparent flow and sell. The next major data due is American inflation on 10 April, which might give more useful information to work with than headlines.
This is my personal opinion, not the opinion of Exness. This is not a recommendation to trade.
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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.