Market selloff poses a threat to the gold's performance

14 Feb

Finally, our expectations for gold to slide below $2,000 were fulfilled yesterday when the shiny metal sold off following the release of higher-than-expected inflation data in the United States. Given the hell breaking lose (yesterday) in the stock market, we remain concerned about gold’s performance in the short and medium term (while being bullish in the long term). It is very likely that the selloff in stocks will negatively affect gold’s price (if it continues), dragging it to $1,950 and potentially even lower (depending on the new developments). In line with our previous assessments, we patiently wait for a better price to manifest itself before taking advantage of the opportunity (ideally waiting for the dip below $1,900).


Illustration 1.01

The image above shows the daily chart of XAUUSD and adjusted fan lines. The yellow arrow indicates a bearish breakout below the third fan line.

Illustration 1.02

Illustration 1.02 portrays the daily graph of XAUUSD and simple support/resistance levels derived from peaks and troughs.

Illustration 1.03

On the daily time frame, the MACD crossed into the bearish territory, bolstering the odds of gold continuing lower.

Technical analysis
Daily timeframe = Bearish
Weekly timeframe = Neutral (turning slightly bearish)

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor or any other entity. Your own due diligence is highly advised before entering a trade.