Gold has a poor week

24 Mei

Gold was a touch firmer this morning, but it’s hard to say if the price has found a floor yet. It’s been a bad week for the precious metal, even though it rallied on Monday to hit a record intra-day, and closing, high. Since then it’s been all downhill, and sharply. This morning it traded at $2,325 which represented a decline of 5% from Monday’s high. The move has led to a downturn in the daily MACD, suggesting that gold could have further to fall. It certainly wouldn’t be much of a stretch to see it retest $2,300. This level, and the area just below, acted as support earlier this month, and it feels as if it wouldn’t take much selling to push it back down there. But as ever, strong rallies can appear out of nowhere, particularly after significant pullbacks. That applies to silver as well. Silver hit a multi-year high on Monday, around $32.50. It too has pulled back sharply since then, coming within a few cents of $30 per ounce, for a high-low sell-off this week of around 7.5%. The area just below $30 has acted as significant resistance previously, so it seem reasonable to assume that it should act as support now. The question is whether this level has already been tested and held successfully, or if there’s more downside to come.