Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Chart Of The Day: Gold Fundamentals, Technicals Disagree On The Metal's Next Move

By Investing.com (Pinchas Cohen/Investing.com)CommoditiesDec 02, 2021 01:27
au.investing.com/analysis/chart-of-the-day-gold-fundamentals-technicals-disagree-on-the-metals-next-move-200493585
Chart Of The Day: Gold Fundamentals, Technicals Disagree On The Metal's Next Move
By Investing.com (Pinchas Cohen/Investing.com)   |  Dec 02, 2021 01:27
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
XAU/USD
-0.60%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DX
+0.61%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
Gold
-0.69%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
US2US...
+-18.76%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Fed Chair Jerome Powell testified before Congress on Tuesday and among other things said inflation is a bigger problem than the central bank had admitted until now. He added that it's now appropriate to drop the word "transient," as inflation has not proven to be a blip. As such, he indicated the Federal Reserve could trim bond purchasing more quickly than scheduled, opening the door for higher interest rates as early as the first half of 2022.

This pivot in the Fed's position—along with the path to faster tightening—should have boosted the dollar and weighed on gold. However, in Wednesday's trading, the opposite is occurring.

Fundamentally, the Treasury yield curve has flattened, which could be behind this counterintuitive market reaction. Here's what gold's technicals are signaling:

Gold Daily
Gold Daily

The yellow metal found support at the bottom of a rising channel, the line where supply dried out and pushed prices back up to the top of the rising channel.

The ROC is showing signs of gold bottoming out.

Trading Strategies

Conservative traders should stay out of this trade as it goes contrary to the fundamental outlook.

Moderate traders would risk a long position if the price closes above yesterday's opening price, where it's trading intraday, at time of writing.

Aggressive traders could enter a long position now, with a tight stop-loss below yesterday's low, provided they accept the higher risk of moving before the rest of the market.

Trade Sample

  • Entry: $1,785
  • Stop-Loss: $1,770
  • Risk: $15
  • Target: $1,860
  • Reward: $75
  • Risk-Reward Ratio: 1:5
Chart Of The Day: Gold Fundamentals, Technicals Disagree On The Metal's Next Move
 

Related Articles

ING Economic and Financial Analysis
Gold Enters Bear Territory By ING Economic and Financial Analysis - Sep 27, 2022 1

US dollar strength and central bank tightening have weighed heavily on the gold market. And with further tightening expected there is room for more downside in the near term....

Chart Of The Day: Gold Fundamentals, Technicals Disagree On The Metal's Next Move

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email