Gold: double or quits?
Gold: double or quits? This proposition well represents the current situation for the yellow metal. Bullion just reached a new seven-month low at $1,760, before showing some rebound impulse to $1,775. We are now seeing an interesting challenge between the long term bullish trend and the short term bearish movement, which seems to be predominant in the current phase.
From a technical point of view, we are still in a negative mood and only a solid recovery above $1,800 would calm the situation. Despite the rally of 2020, bullion is still in an unsafe position as investors continue to bet on growing yields in the US and put money into stocks, hoping for quicker returns and profits. All this is also supported by expectations of a solid rebound of economies this year, mostly thanks to the roll-out of vaccine programmes and a decline of new Covid-19 cases.
Carlo Alberto De Casa – Chief analyst, ActivTrades
Having started the week on the front foot, the US dollar index is now into its second consecutive session of losses, following the disappointment caused by the latest US employment data, which was published late on Thursday. The state of the US labour market is perhaps a reminder that the country’s economy is far from being out of the woods, and that the recent focus on the possibility of fiscal stimulus triggering a rise in inflation, and bringing about a pivot in the Fed’s monetary policy, could be premature.
Ricardo Evangelista – Senior Analyst, ActivTrades
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