Friday 18 November 2016

Shining Dawn Tumbles Down

While markets are relatively calm now as Trump’s victory seems to be digested, Gold is extending sell-offs and slided downwards to pin lowest level, not seen since May 2016. Furthermore we have two key factors, that have influenced negatively to the precious metal – the sell-off in treasuries and the rising expectations of the forthcoming Fed rate-hike action.

Technical indicators are showing oversold conditions. RSI is sliding around 30% and stochastic is placed within extreme low values and is displaying weak bearish momentum. 
At the time of writing XAU/USD is trading at $1207 and has crossed the 50% Fibonacci retracement level at $1210, acting as a strong support. Meanwhile the 50-day moving average crossed with the 200-day moving average and has passed below it. This could only increase the pressure on Gold as this situation is interpreted differently by traders. 
In the short-term expectations remain bearish with eventual further drop to next support, located at $1172 (61.8% Fibonacci retracement level).


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