International spot gold fluctuated around the $1,287/ ounce line at the beginning of the trading session on Tuesday (March 5). Short-term gold prices were fine-tuned in a small range, with gold temporarily trading at $1,287.10/oz.
Where is the next support level for gold after the consecutive plummets?
Although the strength of the U.S. dollar is a major headwind for the gold market, some analysts pointed out that gold has also faced another major obstacle in the near future, that is, investor sentiment towards the stock market. improved. After hitting a 10-month high, gold has been trending lower and is expected to test key support levels in the near term. Currently, gold prices have plummeted by more than $50 from last month's high.
Although the dollar has risen to a new high in nearly two weeks, analysts say it is the stock market that is really causing gold prices to weaken again. The S&P 500 index (SPX) is off to its best two-month start since 1991. So far this year, the S&P 500 is up more than 11%.
"We believe the main factor under pressure on gold is good market participant sentiment, as evidenced by rising stock markets." Investors are currently reducing demand for gold as a safe-haven asset. Analysts pointed out that on Friday, SPDR Gold Shares recorded its largest single-day outflow so far this year as the ETF holdings fell by 11 tons.
George Gero, managing director of RBC Wealth Management, noted that he is watching the stock market to determine how long the current gold sell-off will last. He explained that Powell's speech last week helped divert investors' attention away from recession risks. Until recently, recession risk dominated market sentiment. Despite risks to global growth, Powell said in two days of congressional testimony that the Fed still expects the U.S. economy to grow, albeit at a slower pace than in 2019.
Gero said that investors are currently focusing on economic growth and low inflationary pressure. "Those two factors are bad for gold." As for how low gold prices could fall in the near future, many analysts expect long-term support at $1,275, a key retracement level for gold's recent rally. Ole Hansen, head of commodity strategy at Saxo Bank, said on Friday that gold prices may fall to $1,275 but remain in the long-term upward trend established at the beginning of the fourth quarter of 2018.
During the golden 4-hour continuous negative decline, with the correction of a single small positive line, the double turned negative and broke lower. In the weak market, corrections were replaced by consolidation, and no rebound was seen. In the short term, the weak downward trend is still driving the indicators downward. Once the moving average system all turns around, the short-term chart will emerge as a unilateral wave. There is less room for rebound in the hourly chart. The low position digests the bottom divergence of MACD in the attached chart. The high of 1289.40 US dollars/ounce in late last night in has some small resistance. Combined with yesterday's decline of 1296.70 US dollars/ounce, it is the critical point for short positions today. Generally speaking, in a weak market, the rebound will not exceed the previous day's high point. Therefore, today gold operation is short at 1288-1289 US dollars/ounce, with stop loss of 1293.50 US dollars/ounce, and the target is 1280-1277 US dollars/ounce. According to the gold market center of
Jintou.com, at 10:07 Beijing time, today’s gold spot price was reported at US$1,287.10 per ounce.
Warm reminder: Please pay attention to the Jintou.com APP for specific operations. The market is changing rapidly, so investment needs to be cautious. The operation strategy is for reference only.
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