Stay short on gold as it continues to remain bearish


Gold prices continue to be bearish today, under pressure from a more stable dollar as investors brace for further aggressive interest rate hikes by the US Federal Reserve and other major central banks this week as they try to keep inflation from rising. The USD index has gained around 0.5% so far today as most other major currencies continue to fall.

15 Minute Gold Chart – The 200 SMA Keeps Pressure Down

Sell ​​Gold at the 200 SMA after the upper retracement

As a result, gold prices continued to decline and they extended losses, after dropping below the major support zone at around $1,680 last week. The yellow metal had fallen sharply the previous week, weighed down by gains in the USD index and strength in US bond yields. Last week’s U.S. inflation data, combined with strong labor market and retail sales figures, prompted some analysts to predict a full one percentage point hike by the Fed later this week. .

Today Gold made a big move in the early morning hours after markets opened, but the jump stopped around the 200 SMA (purple) on the 15 minute chart and the decline resumed . Some time ago we saw another upward retracement, but the 200 SMA continued to hold as resistance and we decided to open a gold sell signal, which closed in profit as this moving average again rejected the price.

All eyes are on the Fed’s monetary policy decision later in the week. Although most analysts are expecting a 75 basis point hike, some see the US central bank rising 100 basis points. High interest rates increase the opportunity cost of holding non-performing bullion.



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