Gold - Looking for signs of decoupling
To our surprise, gold has been holding up very well after the last FED decision, which we thought would weigh on the gold market and potentially drag it toward 1600 USD. In our previous ideas, we said that we were growing increasingly anxious about gold's performance in the short-term while staying bullish in the long-term. Additionally, we stated that the current and (a potential) future weakness could bring an excellent opportunity for investors to add gold to their portfolios.
Despite that, we remain somewhat cautious as the gold market has been highly correlated to the stock market. Indeed, at the moment, the stock market undergoes relief after marking new lows for the year, and gold enjoys a time of comfort with it. However, we expect the selling pressure to return in the stock market and potentially drag gold lower.
However, we also consider decoupling between the stock and the gold markets over time. For that reason, we will closely monitor the price action, volume, and fundamental factors driving the market. We will update our thoughts as time progresses.
Illustration 1.01
We will pay close attention to the 50-day SMA as it currently acts as the critical resistance level. If the price manages to break above it, it will be bullish; however, the failure will suggest otherwise.
Technical analysis - daily time frame
RSI and Stochastic are bullish. MACD points to the upside but stays in the bearish area. DM+ and DM- performed a bullish crossover. Overall, the daily time frame is bullish.
Technical analysis - weekly time frame
RSI is slightly bullish. Stochastic and MACD are neutral. DM+ and DM- are bearish. Overall, the weekly time frame gives mixed signals.
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 be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
Despite that, we remain somewhat cautious as the gold market has been highly correlated to the stock market. Indeed, at the moment, the stock market undergoes relief after marking new lows for the year, and gold enjoys a time of comfort with it. However, we expect the selling pressure to return in the stock market and potentially drag gold lower.
However, we also consider decoupling between the stock and the gold markets over time. For that reason, we will closely monitor the price action, volume, and fundamental factors driving the market. We will update our thoughts as time progresses.
Illustration 1.01
We will pay close attention to the 50-day SMA as it currently acts as the critical resistance level. If the price manages to break above it, it will be bullish; however, the failure will suggest otherwise.
Technical analysis - daily time frame
RSI and Stochastic are bullish. MACD points to the upside but stays in the bearish area. DM+ and DM- performed a bullish crossover. Overall, the daily time frame is bullish.
Technical analysis - weekly time frame
RSI is slightly bullish. Stochastic and MACD are neutral. DM+ and DM- are bearish. Overall, the weekly time frame gives mixed signals.
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 be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
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