Gold sell

Gold reverses downward and starts moving towards the 2310 level

13 May 2024 263
AntonVolkov
AntonVolkov

Listed among the best MarketCheese authors
3rd in the segment "Currencies"
Gold reverses downward and starts moving towards the 2310 level

At the end of last week, gold prices showed strong growth momentum. The yellow metal rose from $2310 to $2380 an ounce in 2 trading sessions, but here the sellers took the initiative. The pullback that began on Friday continues today. At this rate, gold prices can quickly return to the 2310 level, and the events of the next few days will accelerate the downward movement.

 

Now the main attention of financial market participants is focused on the U.S. inflation data for April. The statistics will be published on Wednesday. Bloomberg analysts expect the first slowdown in price growth for the core indicator in six months. However, it should be noted that in the last 3 cases, the inflation figures turned out to be worse than forecasts. This discrepancy led to a significant decline in gold prices, and such a scenario should not be ruled out this time either.

 

Meanwhile, demand for the physical metal remains subdued. Reuters' sources among jewelry companies in India report low sales during Friday's major festival. According to preliminary estimates, demand for gold jewelry slumped by a third compared to last year. The drop in sales far exceeded the expectations of traders in the local bullion market.

 

Prithviraj Kothari, president of the Indian Bullion and Jewelers Association, says the main reason for the drop in demand is the high price of gold. The rupee value of the metal has risen more than 20% year-on-year. China is also seeing a cooling in retail demand for gold, although to a lesser extent. Peter Fung of Wing Fung Precious Metals sees a lull in the Chinese market. According to him, consumers will return to buying the yellow metal when the price falls to at least $2250 an ounce.

 

The main short-term target for the bears in the gold market is now the 2310 level. A break below this level will open the way to the two week lows in the 2280 area.

 


Consider the following trading strategy:


Selling gold at the current price. Take profit – 2310. Stop loss – 2380. 


Traders may also use a Trailing stop instead of a fixed Stop loss at their discretion

This content is for informational purposes only and is not intended to be investing advice.

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AntonVolkov
AntonVolkov

Listed among the best MarketCheese authors
3rd in the segment "Currencies"
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