Gold slumps

25 Nov

Gold has had a bad start to this holiday-shortened week. It fell sharply overnight, dropping $80, or close to 3%, in just three hours. It has managed to find a footing since then, and has been making back some of its losses in the European session. The overnight sell-off brought an end to gold’s steady upside progress over the last ten days. This followed gold’s slump in the aftermath of Trump’s election victory, as investors reacted to the surging dollar and jump in bond yields. That sell-off helped take some of the heat out of what had become an overbought market. The post-Trump slump helped to reset the daily MACD and provide a base for last week’s rally. But today’s move is quite unwelcome for the bulls, although it remains to be seen if it has caused significant damage to the technical picture. If gold can continue to stabilise, then the bulls should regain some confidence. But the Thanksgiving break on Thursday does nothing to help clarify the outlook.