Gold: The bulls just cannot get a handle on the sell-off right now [Video]
|Gold
The decline of gold and its intraday volatility are astounding right now (although this can be said of a lot of markets). Yesterday’s daily range of $122 was the fourth largest high/low range ever on gold and was more than double the Average True Range of $54. The trouble is that the bulls just cannot get a handle on the sell-off right now. A run of enormous bear candles has continued even into today’s session. Momentum has now taken a decisive turn for the worse, with RSI hitting 30. This is the lowest since August 2018, when recovery first started to build into the bull market that has been a feature of the past 18 months. Whilst the daily chart shows bear candles, we remain cautious. This is a bear move that has momentum for now and our positive medium term outlook (of using weakness as a chance to buy gold) is now on review. We need to see evidence of sustainable recovery before we have any conviction that buying gold will not simply be sold into again. The hourly chart is failing at lower levels, with bearish configuration across hourly momentum indicators. The hourly RSI is consistently failing around 50 and hourly MACD failing under neutral. A series of lower highs have formed, with initially $1519 now resistance, whilst a downtrend has also formed (around $1555 this morning). Although the market rebounded off $1450 (a significant move with current volatility) the rolling over at $1519 looks to be eyeing this support again. This also came a handful of bucks above the key $1445 November low, a breach of which would be a critical moment that would massively change the long term outlook.
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