Gold is getting smoked right now as rising Treasury yields and a stronger dollar tighten financial conditions, with short-term correlations suggesting bullion is no longer trading like a traditional inflation hedge or haven.
The price action has looked heavy for weeks, setting lower highs after repeated rejections at the 50-day simple moving average. Initial support at $4650 gave way before bullion sliced through the March uptrend like a hot knife through butter, eventually stalling at $4500 support.
But with risk appetite souring again in Asia alongside a firmer USD and elevated US yields, that level has now buckled, leaving the price trading at multi-month lows.
We’ve already seen a backtest and rejection at $4500, making it a useful level to build bearish setups around should the price fail there again, allowing for shorts to be set beneath with a tight stop above, targeting the 200-day simple moving average initially.
A break beneath that longer-term level would really start raising questions about gold’s broader trajectory, bringing uptrend support from the December 2024 lows and horizontal support around $4100 into focus on the downside.
Of course, if the price were to reclaim $4500 support and hold there, it could open the door for countertrend longs with a tight stop beneath for protection, initially targeting a move back towards $4650.
However, the oscillators continue to send an increasingly bearish signal. RSI (14) is trending lower below 50 without yet reaching oversold territory, while MACD has staged a bearish crossover and continues to push deeper into negative territory.
The combined signal suggests downside momentum is building, favouring short setups over longs.
Good luck!
DS
The price action has looked heavy for weeks, setting lower highs after repeated rejections at the 50-day simple moving average. Initial support at $4650 gave way before bullion sliced through the March uptrend like a hot knife through butter, eventually stalling at $4500 support.
But with risk appetite souring again in Asia alongside a firmer USD and elevated US yields, that level has now buckled, leaving the price trading at multi-month lows.
We’ve already seen a backtest and rejection at $4500, making it a useful level to build bearish setups around should the price fail there again, allowing for shorts to be set beneath with a tight stop above, targeting the 200-day simple moving average initially.
A break beneath that longer-term level would really start raising questions about gold’s broader trajectory, bringing uptrend support from the December 2024 lows and horizontal support around $4100 into focus on the downside.
Of course, if the price were to reclaim $4500 support and hold there, it could open the door for countertrend longs with a tight stop beneath for protection, initially targeting a move back towards $4650.
However, the oscillators continue to send an increasingly bearish signal. RSI (14) is trending lower below 50 without yet reaching oversold territory, while MACD has staged a bearish crossover and continues to push deeper into negative territory.
The combined signal suggests downside momentum is building, favouring short setups over longs.
Good luck!
DS
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