Selling the Rally in Gold After Stalling at the 50 SMA
Gold turned bearish this month after having a fantastic month in October with some massive gains which sent the price above $2,000 as it remained bullish throughout last month. The geopolitical issues in the Middle East were the obvious factor, but in November Gold started slipping lower as tensions didn’t spread further in the region. Although, after today’s US CPI inflation report the sentiment has changed, at least for the time being.
As tensions linger in Gaza but don’t spread further in the region, the Gold price (XAU/USD) reversed after failing to maintain gains over $2,000. XAU continues to fall as the upside risks from Middle East tensions fade. XAU remains under pressure as market participants anticipate a reduction in hostilities between Israel and Palestine.
Along with easing Middle East tensions, the Federal Reserve’s anxiety over interest rate forecasts reduced Gold’s appeal, sending it to $1,932, with the 20 SMA (gray) acting as resistance on the daily chart. But, after today’s CPI (consumer price index) figures from the US which were soft, the downtrend has been broken, although buyers will need to push above the 50 SMA (yellow) as well. We decided to open a sell Gold signal up there since the price stalled and it’s likely we’re gonna see a retrace lower before another push higher.
The US 10-year treasury yields touched 4.70% and looked like they were thinking about widening the top of the recent range. Now they’re just one basis point away from the range bottom. US 10s are down 15 bps to 4.48%, just above last week’s low of 4.473%. But we’ll have to wait and see if the bond market wants to push further ahead of tomorrow’s retail sales data.
Gold Live Chart
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