Gold: a golden death cross has formed, eyes on Dec 2017 lows


  • Gold is still in the hands of the bears.
  • A golden death cross has formed and is the first to form in the commodity since around November of 2016.

The price of Gold has made a round trip at the start of this week, picking up demand at the Asian lows of $1,264.42 to $1,270.52 the European high and carving out a downside case within a London/NY chop to trade at $1,264.7 the current low - At the time of writing, Gold is trading at $1,265.80 heading into the NY close. 

There was a modest flight to safety in the markets on Monday, with some trade war noise going on in the background where China and the EU came out of talks united against the threat of US protectionism. China’s Vice Premier Liu He announced that both the EU and China are “firmly oppose unilateralism and protectionism and think these actions may bring recession and turbulence to the global economy”.

The US yield in the 10-years was lower by 2pbs at 2.87% and within the day's rage of 2.86%-2.89%. The bund yield was down 1bp to 0.33%. The DXY was down 0.19% at the time of writing having traded between 94.21 - 94.70, and lower against all G10 with the exception of AUD, while the EUR outperformed. Commodities, in general, softened as well though, with the CRB Index down around 1.00% at the time of writing. Global equity markets were weak. The S&P 500 and DJIA were down 2.0% and 1.8% at the time of writing. All in all, leaving gold to trade in a sideways range at the start of the week. 

From the economic front, despite interest rates climbing, US new home sales were firmer than expected in May, up 6.7% m/m at 689k vs 667k consensus and prior 646k. Sales were up 14% y/y with properties under construction up 15.8% on an annual basis. Elsewhere, Dallas Fed manufacturing activity rose to 36.5 in June, from 26.8 in May, but the underlying details were mixed. 

Gold in a summary

In summary, gold is still in the hands of the bears and made the lowest level on a spot basis year to date last week, even as the U.S. dollar, strong throughout the month, weakened against its currency rivals. The path of least resistance remains to the downside although traders are looking out for further trade war angst volatility that could easily see the safe haven run back towards the psychological $1,300 level. However, while the Federal Reserve continues its plan to raise benchmark interest rates, that is bullish for the greenback that trades in a negative correlation to gold.

Gold levels

Gold Technical Analysis: Yellow metal consolidating below $1,270/oz

On the wider time framed charts, a golden death cross has formed and is the first to form in the commodity since around November of 2016; (The 50-D SMA moving average for gold prices, currently at $1,303 is falling below its longer-term 200-D SMA moving average at $1,305, potentially marking this spot a short-term decline into a longer-term downtrend). Supports for the pair align at $1264 (daily low), 1252.50 (Dec. 18 low) and $1243 (Dec. 8 low). On the flipside, resistances look to be 1276 (Jun. 20 high) ahead of $1289 (21-D SMA) and $1300 (psychological level).

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD trades below 1.1450 despite disappointing US data

EUR/USD is having a difficult time gathering bullish momentum in the early American session and trades in the negative territory below 1.1450. The US Census Bureau reported on Friday that Retail Sales in December fell by 1.9%, missing the market expectation of a no-change by a wide margin.

EUR/USD News

GBP/USD drops below 1.3700 as dollar gains traction

GBP/USD stays under modest bearish pressure in the American session and trades below 1.3700. The US Dollar Index is clinging to modest daily recovery gains near 95.00 despite weaker-than-forecast macroeconomic data releases from the US.

GBP/USD News

Gold fluctuates in daily range above $1,820 after US data

Gold declined to $1,820 during the European trading hours but managed to edge higher toward $1,830 in the early American. The benchmark 10-year US Treasury bond yield retreated from 1.75% after the dismal US data, allowing XAU/USD to gain traction.

Gold News

Dogecoin price on track to hit new highs, rallying 16% with Tesla payments going live

Tesla announced that it accepts Dogecoin and cannot receive or detect any other cryptocurrency. Analysts have predicted an explosive rally in Dogecoin price, continuing the uptrend. 

Read more

Why did TSLA stock fall 7% on Thursday?

Tesla stock dumps on Thursday as tech takes a bath. TSLA shares fell nearly 7% to close at $1,031.56. Tesla support at the short-term pivot remains at $980.

Read more

Forex MAJORS

Cryptocurrencies

Signatures