Gold and silver dropped sharply in early trade this morning, adding to yesterday’s losses. There are plenty of excuses for the sell-off, including an easing up on trade tensions, and a bounce in the US dollar. As far as gold is concerned, it should be added that the price is correcting after its protracted bull run.
This took gold to a fresh record high of $3,500 last Tuesday, and extremely overbought levels. It then proceeded to fall sharply. But it’s worth noting that gold has found some support just north of $3,260, close to where it is currently trading.
Source: TN Trader
It looks as if many traders are expecting prices to recover, and banking on new all-time highs. That’s certainly possible, particularly as there’s no compelling reason as yet for investors to rush out of safe havens and load up on tech stocks again.
It doesn’t really matter what the Trump administration says about impending trade deals with India, the EU or Japan. The real fight is with China, and there are no signs of any accommodation between the two sides, as yet.
But gold remains overbought, even after this week’s pullback, and a test of $3,200 as support would be just the first staging post to help bring the MACD down to more reasonable levels.
