Gold fails on the 1200 handle; bullish tone above 50 SMA

Currently, Gold is trading at 1196.34, up +0.39% on the day, having posted a daily high at 1206.91 and fresh low at 1190.99.

Gold took off as market participants allocate more into precious metals to hedge their inflation exposure. 

"While the uncertainties are sending retail investors and overseas buyers to the gold market, institutional investors are unloading their bullion in favor of higher returns in U.S. equities, as the Dow Jones Industrial Average hovers near 20,000", explained a Bloomberg Report, adding, "Last week, $15 billion poured into equity ETFs, as $106 million was withdrawn from funds backed by precious metals. Equities have rallied since Trump’s election to the presidency amid expectations of accelerating economic growth. Even hedge funds and other large speculators who are required to report holdings to the U.S. government have been paring their bullish bets on gold since the middle of November."  

Gold Technical Analysis

To the upside, gold bugs target the immediate resistance at 1243 near the 100 SMA (red color), then at 1264 around the 200 SMA (green color). If gold prices fail to hold above its 50 SMA (blue color) the metal may trade lower towards the 1180 handle and in the worst case, all the way back to the bottom of the uptrend base on the 1120 handle. The daily stochastic seems to leave the overbought territory which serves as the indication to expect further losses at least in the medium-term. 


Elliott Wave Analysis: GOLD Intraday View