A rebound after a sharp drop? Here's why I'll be going long
Hello, fellow traders!
This week, spot Gold showed good gains reaching a 2-week high of around $2368 on Friday morning. However, after the release of new higher than expected US Purchasing Manager Indices (PMI) data, Gold lost its weekly gains and closed the week at around $2321 - below its 50-day Simple Moving Average.
Higher PMI numbers suggest that inflation will likely stay high, meaning the US Federal Reserve might need to delay any interest rate cuts and put pressure on Gold prices.
📊 Let’s look at the data:
So, I’ve been looking at the Gold price movement over the last months, and it’s been quite a ride.
Right around the end of April and the start of May, the Gold price started around $2,350. But then, the price took quite a tumble, broke the support and dropped to about $2,280 by May 3rd. Up to May 10, price was crawling up eventually breaking the resistance and setting a new high at around $2,450.
Price then bounced back down to the support zone and a period of tug-of-war started, indicating a consolidation phase.
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