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In the last couple of years, gold has shown us a relatively strong uptrend which started in August 2018. Since then, the gold price has increased healthy, making higher highs and minor corrections to climb further in price.
In August 2020, the gold price peaked at 2070 US dollars per ounce. Since then, the gold price direction changed to a downtrend and fell from August 2020 to the beginning of March 2021. The gold price has been moving sideways between 1685 – 1920 US dollars per ounce from that point.
This technical analysis article analyzes the indicators and potential breakout points for a new uptrend and possible breakout points for a downtrend.
*Red lines are downtrend. The heavy red line is the long-term trendline.
*Green lines are uptrend. The heavy green line is a long-term trendline.
*Blue lines are short term support & resistance lines
(Picture 1. XAUUSD Trendlines / Support & Resistance)
(Picture 2. Fibanocci retracements)
*New York (CNN Business) – Prices remain high in America, and inflation shows no sign of slowing down anytime soon.
The Bureau of Economic Analysis reported Thursday that a critical measure of US inflation rose 5.7 percent in the year ended November. The consumer spending price index increased at the fastest rate since July 1982.
Each month, economists use a variety of inflation gauges, but the Federal Reserve’s preferred measure is PCE inflation, which informs the central bank’s policy decisions.
*Over the past five years, gains by US real yields have been generally correlated with losses by gold prices. A simple linear regression of the relationship between the weekly price change in gold prices and the weekly basis points change for the US 10-year actual yield reveals a correlation of -0.36. As a rule of thumb, rising real yields are bad for gold prices – DailyFX source by Bloomberg
Disclaimer: This article is for informational purposes only and is not intended as an investment analysis or recommendation to sell or buy commodities. Tavex is not responsible for any decisions made based on this information. Investing is associated with opportunities and risks, and the market value of commodities can both increase and decrease. Past or future yields on the commodities and financial ratios shown above do not represent a promise or an indication of future earnings.