Gold Chart Speaks Itself
Gold's reaction to the triumph of Donald Trump was highly interesting yesterday. The uptrend of Gold was purely destroyed with red and very long candles that made more than 3% drop in the price in a single day.
Of course the initial reaction of the market was rather emotional because they had a couple of narratives to let Gold lose some value.
1 - GOLD has been in an uptrend and the price reached to a level of bubble in the short term. Thus, a healthy correction is nothing terrible for the asset.
2—The other markets performed poorly compared to Gold. So, switching value from Gold to an underperforming asset means investing in an asset with a higher potential to grow revenue.
3 - Donald Trump does not want to fund the sides in the wars around the world. So, the ongoing battles are likely to be finalized, which will cut one of the sources of narrative for Gold and the need for Gold decreases if there is no global conflict to trigger it.
The list of reasons can be longer but the most important part is not the actual cause but the current situation in Gold. Many people ask economists if the uptrend in Gold is over or the trend has gone through some trouble with a lose of $100 in OZ in a day.
In the daily timeframe, the 50 - day moving average became the support level for Gold to slow down the lose of value due to the fear on the market. Luckily, the price retraced from a strong support level here.
However, the 2717 is the 20 - day moving average level that may take some time to break above. Although the daily recovery of Gold today is more than 1,7%, it might be too early to start celebrating the comeback of the golden trend.
Shorter timeframes can help us gain more insight, too!
The price was able to stay in above 200 4H candles which is a good sign of recovery for Gold. However, the chart indicates that there are some resistance levels which were formerly support levels to push the price higher.
Though the effects of the shocking drop can still be valid, the charts of Gold indicate that there is no sign of trend reversal from positive to negative in the short timeframe. Over time, the previous ATH levels are likely to be hit. Then, we mat see some furthe.
What do you think about the price actions by Gold?
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