Gold was a touch lower this morning. This follows on from a flat close on Friday when it ended around the $2,910 area. It fell below $2,900 overnight and was still in negative territory at the time of writing. It looks as if gold and silver have come off in sympathy with this morning’s sell-off in risk assets.
The losses in precious metals have been relatively modest so far, which suggests that weaker hands, most likely leveraged speculators, are closing out positions and raising funds to cover losses elsewhere, particularly across US stock indices. That’s the theory anyway.
Should there be a deeper and more protracted drawdown across precious metals, then something else is happening. Gold spent last week recovering from the 4% sell-off at the end of February. While this wasn’t a particularly big move, it helped to partially reset the daily MACD (Moving Average Convergence Divergence) from very overbought levels.
Source: TN Trader
The MACD never fell back to neutral territory, but it has pulled back enough to allow for more upside. But, there’s still the potential for a deeper sell-off.
