Price of Gold Briefly Exceeded $2,050 per Ounce
In addition to new records in the stock markets, the reaction to yesterday's news about inflation in the US was also a decrease in government bond yields and a rapid rise in the price of gold the cost of XAU/USD jumped by 0.9% in just one hour, while the day's high exceeded USD 2,050 per ounce .
However, on Friday morning the price of XAU/USD dropped below USD 2,040 did market participants misjudge the impact of US inflation on the price of gold?
XAU/USD chart shows that:
the price of gold is in a downward trend (shown in red);
yesterday, the price not only touched the psychological level of USD 2,050, but also reached the upper limit of the downward red channel. That is, both lines acted as a block of resistance, which appears to be a serious obstacle to the upward impulse (shown by blue lines).
A sharp change in sentiment (yesterday, positive, today, negative) may be similar to a sharp change in mood (in a mirror image) that happened in mid-February. As the blue arrows show, the negativity caused by the price falling below the psychological level of USD 2,000 within a few days was replaced by positive sentiment.
Therefore, it is possible that the activation of the bears, noticeable in the action of the price of gold this morning, may result in an attempt to resume the development of the market trend within the red channel. The nearest serious test of the seriousness of the bears' intentions may be the lower blue line, which worked as support in the second half of February.
Read more: https://fxopen.com/blog/en/oa-price-of-gold-briefly-exceeded-2-050-per-ounce/
Text source: Forex Trading Blog
