Gold prices broke a streak of 9 consecutive higher closes, easing slightly after the bigger-than-expected drop in US GDP The dollar index continued to decline as US yields moved to the downside, with a 10-year yield closing below 55 basis points. The recent downward trend in the US dollar is likely to drive the yellow metal
Technical analysis
Gold prices declined on Thursday after rising for 9 consecutive days. Prices are ready to close at a new monthly high for all time. The last time this happened in 2008, gold prices more than doubled, from $ 700 per ounce to $ 1,921 per ounce 4 years later. This would target more than 5,200 in gold. Support is seen near the breakout level at $ 1,921 and then the 10-day moving average at $ 1,895. Short-term momentum has turned negative as the fast stochastic recently generated a cross sell signal. The RSI has also changed and is printing a reading of 80, above the overbought trigger level of 70, which could herald a correction.
Q2 GDP contracts abruptly
Second-quarter GDP plunged the most in history, contracting by 32.9% year-on-year, according to the Commerce Department’s first reading of US growth Economists had been looking for a drop of 34, 7%, which means that despite the decrease it was better than expected. With first-quarter growth of 5%, this number officially put the American economy into recession. This news is not good for the current president. No president in modern history has won reelection while there was a recession.
