Note: Our previous idea on Gold reached the $1,745 resistance, which was a nice level to close the trade.
Gold reversed some of yesterday's losses after finding support at a rising trendline and a horizontal support zone on the daily chart.
It's important to note that the recent uptrend is losing steam, with the fresh lower high formed on the daily. Any USD strength in the coming days (e.g. if risk appetite deteriorates), could push gold further down and cause a break of the $1,700 support.
In the medium term, I keep a bearish view on the yellow metal as risk-off flows could significantly increase in the coming months, given the disagreement between current equity prices and economic fundamentals. The initial reaction will likely be a sell-off in gold as investors look for liquidity, and a strengthening US dollar.
In the short-term, however, we could see a retest of $1,725 which acts as the next resistance, followed by $1,745.
Gold reversed some of yesterday's losses after finding support at a rising trendline and a horizontal support zone on the daily chart.
It's important to note that the recent uptrend is losing steam, with the fresh lower high formed on the daily. Any USD strength in the coming days (e.g. if risk appetite deteriorates), could push gold further down and cause a break of the $1,700 support.
In the medium term, I keep a bearish view on the yellow metal as risk-off flows could significantly increase in the coming months, given the disagreement between current equity prices and economic fundamentals. The initial reaction will likely be a sell-off in gold as investors look for liquidity, and a strengthening US dollar.
In the short-term, however, we could see a retest of $1,725 which acts as the next resistance, followed by $1,745.
