Technical Analyst, Saxo Bank
Gold (XAUUSD) is back below key support at 2,319 after failing to close above 2,350, which would have confirmed the resumption of an uptrend.
If Gold breaks below 2,291, it is likely to face a sell-off down to between 2,260 and 2,255, and possibly even lower to around 2,207, which is the 0.786 retracement of the leg up since March.
The strength indicator RSI has been showing divergence for quite some time, a sign of trend exhaustion. A correction is needed.
However, if Gold jumps back to close above 2,352, this likely bearish scenario would be negated, potentially reversing to an uptrend with a target of 2,400
Silver (XAGUSD) seems to be leading the way lower for Gold.
Similar to Gold, the RSI for Silver has also been warning about trend exhaustion for a few weeks.
The current sell-off has taken Silver down to the 0.618 retracement at 26.41, with potential to further decline to the 0.786 retracement and support at around 25.50.
A close above 27.75 will reverse this bearish move.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.