Gold Bounces Off the 50 SMA – Is the Retrace Over?
Skerdian Meta • 1 min read
GOLD has been bullish for a long time, with the global economy weakening and heading towards contraction, as well as the sentiment being mainly negative due to escalating geopolitical and trade tensions. This year the uptrend picked up pace after US killer Iran’s Soleimani and Iran attacked some US bases in Iraq.
But, after the initial scare, the situation calmed down, since iran didn’t kill any US personnel and Trump is not giving any signs of hitting back. As a result, safe havens have been retreating lower in the last few days, with USD/JPY climbing around 200 pips higher, while Gold has given back more than $70 of its previous gains.
Bu, the decline stopped at the 50 SMA (yellow) on the H4 chart for Gold. . This moving average held and it seems like it has turned into support now. The retreat is complete and Gold has bounced around $10 higher, so this might be a good chance for those who want to buy.
Although, if the situation between US and Iran calms further, then the sentiment will improve which would turn Gold bearish. But, technically now Gold is pointing higher right now on the H4 chart. It seems that traders are leaning on safe havens before markets close, just in case tensions escalate further over the weekend, so we might see some irrational price action until then.