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Looking to Sell Retraces Higher in Gold, As MAs Keep Providing Resistance

Posted Monday, February 27, 2023 by
Skerdian Meta • 2 min read

Bearish signs increase for Gold

Gold has been on a bearish trend since early February, following a bullish run that started in November 2022. The recent decline is attributed to the strengthening of the USD and positive economic data in the US. Gold prices surged to $1,960 in early February, but soon after, the price started to decline due to the increasing strength of the USD.

On the H1 chart, gold prices have been facing resistance from the 20 Simple Moving Average (SMA) and have been pushed downwards. The 50 SMA on the H4 chart has also been acting as resistance, signaling a bearish momentum for gold prices. Moreover, the Relative Strength Index (RSI) has also been hovering in the oversold territory, indicating that the bearish momentum is strong.

Gold H1 Chart – MAs Keep Pushing Highs Lower

Gold closed at the bottom at the end of last week

Market sentiment towards gold prices has been negative due to the strengthening of the USD and positive economic data in the US. The recent job data showed better than expected results, which indicates a strengthening of the US economy. Moreover, the Federal Reserve has signaled a hawkish stance, which could further strengthen the USD and push gold prices further down as.

Based on the technical analysis and market sentiment, we expect gold prices to continue their bearish momentum and reach $1,800. The price may even fall below $1,800 if the USD continues to strengthen and positive economic data continues to emerge from the US.

Services have left contraction behind, while the confidence of the US consumer is improving. The slowdown in inflation has lost pace, which is bullish for the USD. However, there may be short-term bullish movements in the price, which may provide selling opportunities for traders and we will try to open sell Gold signals during bounces higher.

Technical charts paint a bearish picture, and market sentiment towards gold prices has been negative. We expect the price to continue its bearish momentum and reach $1,800, with the possibility of falling below this level.