Selling gold in short term with $5,000 target

Gold is currently trading slightly below the resistance zone between $5,200 and $5,250.

The reason for this ceiling is not just technical—it is fundamentally linked to the uptick in crude prices. They have recently surged amid escalating tensions in the Middle East and growing concerns over potential supply disruptions through the Strait of Hormuz—the world’s key energy artery. Expensive commodities have spurred global inflation expectations, particularly in the US. As a result, markets started to factor in a higher probability of the Federal Reserve’s (Fed) more hawkish stance than previously anticipated. This shift has had an immediate positive impact on both currency and debt markets.

Now, we see a stronger dollar, underpinned by today’s climate and rising government bond yields—most notably on the short and medium sections of the curve. Gold, in contrast, is currently losing its luster, as it generates no income. Dollar-linked instruments are more profitable assets, given present conditions. Therefore, demand for the precious metal as a traditional safe haven is gradually cooling down.

The technical setup tells a similar story, underscoring growing sellers’ dominance in the gold market. Here’s what indicators are signaling:

1. The Relative Strength Index (RSI) has recently broken below the 50 threshold, consolidating in bearish territory. Typically, when the RSI exits the neutral area around 50, it shows that sellers are taking control of the market, fighting near key resistance.

2. The Moving Average Convergence/Divergence (MACD) indicator has just slipped into the red, confirming mounting downward momentum and a shift in sentiment.

Technical analysis reveals that $5,000 per troy ounce is likely to be the next logical target for sellers, and there are two reasons to think so. First, this level is a psychologically important barrier. Second, it marked the lowest gold prices since the start of the new phase in the ticklish Middle East situation.

The final recommendation:

— Sell gold at the current price, with a $5,000 target within the next one to two weeks;

— To manage risk, place Stop Loss just above the resistance level ($5,210) if the market plays against us.