Gold prices failed to catch a new rally, after a record of $ 2,075 last year. Some stocks and Bitcoin have skyrocketed from the launch pad in recent months, while the yellow metal landed 19 percent below last year's peak to $ 1,687. Failing to stay above $ 1,700, sales will rise and the gold bulls will have to retreat towards new support lines, according to analysts. Optimism continues to be preserved in the medium and long term.
Putting aside inflation concerns, focusing on the US dollar and global bond yields, gold prices dropped to a 10-month low this week. Fed Chairman Jerome Powell did not give the markets satisfactory statements about keeping bond yields and inflation expectations under control in his speech the previous day, which increased volatility and the downside movements under it accelerated. So what awaits gold from now on?
South facade expands to $ 1,620
According to experts, $ 1,735 is shown as a level that must be passed to recover. Then there is the $ 1,755 level as the second important barrier to be overcome. The sag of gold below $ 1,700 forces the bulls to retreat to new lines of defense. Under $ 1,700, bulls must maintain the 1,690 line, according to analysis by Dhwani Mehta, featured on Fxstreet. Otherwise, they may have to fight on the $ 1,673 front further south. Precious metals analyst Anton Kolhanov warns that the door to $ 1,670-1,680 for yellow gold is open as it remains below $ 1,759, which he sees as resistance.
Credit Suisse also points out that bearish signals continue to come from the markets. While the 2018/2020 bull market's 38.2 percent retracement level is still on the radar at $ 1,726, analysts at Credit Suisse see $ 1,620 as a possibility, stating that the further downward moves will bring about 1,670.
May be the last wave of sales
Independent precious metals analyst Florian Grummes also predicts that gold, which has been in a strong correction for 7 months, may relax in its bearish channel by up to $ 1,660. Grummes argues that it may be the last big wave of sales since the test of $ 2,075 in August. According to Grummes, precious metals will follow an upward trend again in the medium and long term.
StoneX analyst Rhona O'Connel also stated that the trillions of dollars of liquidity circulating for the financial system is still looking for a place to park itself, and that the factors that will support gold in the medium term are in play. According to the analyst, the fact that the Fed and ECB continue to expand their balance sheet by hundreds of billions of dollars each month will bring undertake.