Gold Price Heading for $2,000, As Sellers Pile After Every Bullish Attempt
Gold is increasingly displaying signs of weakness, as it keeps making lower highs, with sellers taking the upper hand in February. Seasonals are also pointing down for Gold from now onward, so XAU seems to be heading for $2,000, which will be a major test for Gold.
Gold witnessed some increased demand in Q4 of 2023, as geopolitical tensions rose and the FED started hinting at rate cuts, in response to economic uncertainties. This sent XAU surging higher by roughly $350, setting a new record high above $2,140s, as safe havens like Gold benefit in such circumstances. However, buyers were unable to hang on to their profits, and the price fell quickly.
Gold Sellers Take Control
So at the moment, sellers remain in charge, as Gold continues to produce lower highs, indicating that the trend is turning bearish. Moving averages have done an excellent job of maintaining prices steady during pullbacks, notably the 50 SMA (yellow) on the daily chart. But this moving average is broken now and the price is establishing below it, heading for the next moving average which is the 100 SMA (green).
Chinese New Year to End Seasonal Demand for Gold
The period of seasonal strength for Gold typically during January and early February due to increased sales for the Chinese New Year, concludes with the start of the Lunar New Year holidays. However, this year, the seasonal trade performed poorly, likely due to overshadowing by hawkish adjustments in monetary policy expectations driven by strong economic data.
XAU briefly fell below this month’s low of $2013 but has since rebounded. Further support levels lie at $2,010, $2,002.50 which is January’s low and $2,000. Considering the current seasonal trends, there may not be a pressing need to purchase Gold unless we see a deterioration in US economic data which is not likely. So, we are trying to sell rebounds and booked profit on a Gold signal, selling after the bounce earlier today.
Gold Live Chart
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