Is Gold Failing at $1,800?
Gold traders have been watching the important $1,800 level for years. Now the yellow metal may be at risk of decisively breaking it.
$1,800 was initially important as a peak in late 2011 after XAUUSD failed to hold $1,900. It was then retested in February and October of 2012 before gold entered a long slide toward $1,000.
Prices spiked to new highs above $2,000 in August 2020 in the wake of coronavirus and the Fed’s aggressive stimulus. But they have trended lower since and made a series of lower highs. The most recent lower high of $1,877 occurred in mid-November.
Another potential signal is the MACD oscillator on this weekly chart. Notice how it turned negative before other dips, like in September 2020 and April 2018. If it starts to fall with prices remaining under $1,800, that could be especially discouraging to the bulls.
Next, you have a difficult macro backdrop with the Fed tapering asset purchases before potential rate hikes in 2022. Bullion also faces competitors as a store of value given the rise of cryptocurrencies.
In conclusion, consider these comparisons versus October 2012: Gold is down about 1 percent. The Consumer Price Index is up 20 percent. Bitcoin is up 525,000 percent.
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This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
$1,800 was initially important as a peak in late 2011 after XAUUSD failed to hold $1,900. It was then retested in February and October of 2012 before gold entered a long slide toward $1,000.
Prices spiked to new highs above $2,000 in August 2020 in the wake of coronavirus and the Fed’s aggressive stimulus. But they have trended lower since and made a series of lower highs. The most recent lower high of $1,877 occurred in mid-November.
Another potential signal is the MACD oscillator on this weekly chart. Notice how it turned negative before other dips, like in September 2020 and April 2018. If it starts to fall with prices remaining under $1,800, that could be especially discouraging to the bulls.
Next, you have a difficult macro backdrop with the Fed tapering asset purchases before potential rate hikes in 2022. Bullion also faces competitors as a store of value given the rise of cryptocurrencies.
In conclusion, consider these comparisons versus October 2012: Gold is down about 1 percent. The Consumer Price Index is up 20 percent. Bitcoin is up 525,000 percent.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradingView is not affiliated with TradeStation Securities Inc. or its affiliates. TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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