Gold was unchanged in early trade this morning, so the market continues to consolidate just north of $2,900. This may all look a bit boring, particularly when compared to the increased volatility and large intra-day swings in US stock indices, but it looks like good news for the bulls.
Gold has proved its resilience, yet again. Having closed at an all-time high above $2,950 just over a fortnight ago, it subsequently sold off. The drop coincided with the sharp sell-off in global equities, led by the US’s tech-heavy NASDAQ. The latter is trading near lows hit yesterday, representing a 14% decline from mid-February’s all-time highs.
By contrast, gold lost 4% over four sessions before it found support and went on to recover over half of those losses. That sell-off, along with the current consolidation, has helped to reset the daily MACD to some extent. It may not be at neutral levels, but it is no longer as overbought as it was this time last month.
Source: TN Trader
This is not to say that it can’t head lower from here, but it also has room to rally from current levels. Silver is also looking constructive, particularly if it is now able to hold above $33 per ounce.
