Analysis of the early plunge in gold this week: Bearishness dominates under the resonance of risk aversion and technical aspects
Market review: Multiple negative factors suppress gold prices
On Monday (May 12) in the Asia-Europe session, spot gold encountered a sell-off, hitting a low of $3,259/ounce during the session, a new low in the past week. There was a short-term flash crash in the European session, with a plunge of $40 in 10 minutes, mainly driven by the following fundamental factors:
Progress in Sino-US trade: Last weekend, the high-level economic and trade officials of China and the United States made substantial progress in the talks in Geneva. Both sides agreed to reduce tariffs to the 10% benchmark level. Market risk appetite has increased, and the demand for gold hedging has dropped sharply.
Geopolitical tensions have eased: Russian President Putin proposed to restart the Russia-Ukraine negotiations in Turkey on the 15th, and the news of the ceasefire between India and Pakistan further weakened the safe-haven buying.
Technical analysis: The bearish pattern is established
Weekly structure: Last week, the long upper shadow positive line was closed, and the pressure pattern was obvious, suggesting that the probability of a medium-term decline has increased.
Daily level: After a series of negative lines, the price closed with a cross star. The rebound momentum was insufficient. The stochastic indicator crossed downward. $3330 became the watershed between long and short positions. If it cannot break through, it will remain bearish.
Hourly chart: After the European session plummeted, the indicator entered the oversold zone but did not show any divergence. There is still room for short-term decline. The key support moved down to the integer mark of $3200. If it effectively falls below, it may open the weekly level correction channel.
Operation strategy: Shorting with the trend
Entry point: Try shorting with a light position near $3250
Stop loss setting: $3260 (guard against short-term rebound)
Target range: $3200 (if it breaks, it can look down to the 3150-3180 area)
Risk warning: Pay attention to the speeches of Fed officials and US inflation expectations data in the evening. If the US dollar index falls or geopolitical risks regenerate variables, it may trigger short covering.
Market review: Multiple negative factors suppress gold prices
On Monday (May 12) in the Asia-Europe session, spot gold encountered a sell-off, hitting a low of $3,259/ounce during the session, a new low in the past week. There was a short-term flash crash in the European session, with a plunge of $40 in 10 minutes, mainly driven by the following fundamental factors:
Progress in Sino-US trade: Last weekend, the high-level economic and trade officials of China and the United States made substantial progress in the talks in Geneva. Both sides agreed to reduce tariffs to the 10% benchmark level. Market risk appetite has increased, and the demand for gold hedging has dropped sharply.
Geopolitical tensions have eased: Russian President Putin proposed to restart the Russia-Ukraine negotiations in Turkey on the 15th, and the news of the ceasefire between India and Pakistan further weakened the safe-haven buying.
Technical analysis: The bearish pattern is established
Weekly structure: Last week, the long upper shadow positive line was closed, and the pressure pattern was obvious, suggesting that the probability of a medium-term decline has increased.
Daily level: After a series of negative lines, the price closed with a cross star. The rebound momentum was insufficient. The stochastic indicator crossed downward. $3330 became the watershed between long and short positions. If it cannot break through, it will remain bearish.
Hourly chart: After the European session plummeted, the indicator entered the oversold zone but did not show any divergence. There is still room for short-term decline. The key support moved down to the integer mark of $3200. If it effectively falls below, it may open the weekly level correction channel.
Operation strategy: Shorting with the trend
Entry point: Try shorting with a light position near $3250
Stop loss setting: $3260 (guard against short-term rebound)
Target range: $3200 (if it breaks, it can look down to the 3150-3180 area)
Risk warning: Pay attention to the speeches of Fed officials and US inflation expectations data in the evening. If the US dollar index falls or geopolitical risks regenerate variables, it may trigger short covering.
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.