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Original title: Black Five Great Sale! Gold is sinking below the 200-day moving average. Are Gold Stocks Showing Signs Of Untying From A False Advance?
FX168 Financial News (North America) News International spot gold fell under pressure on Friday (Nov 27), hitting a low of $ 1,774 per ounce, rapidly falling below the strong 200-day support. On the one hand, improving market risk sentiment has suppressed recently buying gold as a safe haven. On the other hand, weakening liquidity during the Thanksgiving holiday has also increased the likelihood of abnormal market conditions, causing Huang toGold priceTypical holiday fluctuations occurred on the web. However, there is no doubt that the weakness of the US dollar and the rise in the stock market appear to have failed to propel gold higher, which may indicate that market views on gold assets are changing and that they are gradually emerging. signs of dissociation between gold and the stock market. The key factor causing this situation is that, although the demand for coverage still exists, the most influential inflation risk may face suppression.
Recently, the Director of the United States General Services Administration began providing federal resources for the transition of power, breaking the deadlock in the transition of the United States government and eliminating to some extent the uncertainty of the transition of power. At the same time, the news that Yellen could become a US Treasury secretary has further fueled the vague US expectations.Combined with the good news about vaccines, market risk sentiment has improved substantially. . The VIX Panic Index fell below 20 for the first time since February this year, prompting a sharp sell-off in the precious metals market.
However, Yellen’s appointment as US Treasury secretary is actually a double-edged sword for gold. The market will pay attention to how much easing policy it can bring to the United States, which will directly affect the inflation outlook. Another important factor is the speed of the economic recovery. If the vaccine is successfully introduced as soon as possible and the economic recovery accelerates in the future, further easing may be limited, affecting the inflation outlook and hurting gold. Overall, the inflation risk that gold bulls rely heavily on is starting to waver, and downward pressure on gold prices is mounting rapidly in that environment.
From a technical point of view, the price of gold quickly fell below the important 200-day moving average, which is a key test for bullish confidence. If you can’t get back above the 200-day moving average after this week’s close, you can start generating higher sales next week. The next downside target for gold is the 1764.19 level of the 50% Fibonacci retracement level of the uptrend since March this year. If the price of gold regains lost ground at the end of today or early next week, or even goes back above 1800, you should pay attention to the trend of false advances, and the trend of the market outlook remains variable. .
(Daily spot gold chart, source: FX168)
Panorama:
Independent analyst Ross Norman said: “The current concern is that central bank purchases and ETF capital outflows will dissipate. For now, gold remains bearish in the short term and may fall further, but in the long term, given the ultra-low interest rate. And the prospect of more stimulus measures in the economy, the outlook for gold can’t look any better. “
Michael Hewson, Chief Market Analyst at CMC Markets UK, said: “After the price of gold falls below US $ 1,800, it is likely to fall further to US $ 1,760 because optimism around the possible launch of a vaccine continues to suppress demand for this traditional safe haven asset. “
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