- Bearish correction underway?
- A lot of rate cuts are now priced in
- Fib bounce may be a bearish signal
Gold is trading a little lower on Tuesday after bouncing higher once again in recent sessions.
The yellow metal remains buoyed by very aggressive rate-cutting expectations, particularly in the US, but at the same time, it is struggling to generate fresh momentum around the prior record highs, near $2,070.
We saw a spike in early December well above this but the timing of the move and the speed with which it reversed it suggests the market was never fully behind it, so the prior highs continue to look like a significant psychological threshold.
From a technical perspective, the lost momentum is evident in the repeated failure in recent weeks to surpass the prior highs, albeit with the spike in December arguably not reflecting true market sentiment at the time, hence the swift reversal.
Gold Daily
Source – OANDA
It has since broken below a rising trendline which may further reinforce the view that the rally since early October is running on fumes and a correction is potentially underway. As you can see from the 4-hour chart below, the rebound from Thursday’s low both appears short-lived but also ran into strong resistance around the 61.8% Fibonacci retracement level – 28 December high to 11 January low. This again could be viewed as another bearish signal.
Gold 4-Hour
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
