Gold into Bearish Territory
Gold has been at risk of a bearish move for a number of weeks but a dollar breakout tipped it over the edge on Thursday.
The dollar index formed an inverse head and shoulders in recent weeks and a break above 91 took out the neckline, which could be a bullish development in the near-term for the greenback.
This is naturally bad news for the yellow metal, which had been struggling to generate much upside momentum in the first place and a move below $1,800 and the 200/233 day SMA is a further warning of tough times ahead.
A break below $1,765 could see support tested around $1,750, with the next major support level below then being $1,700.
We could see a pullback in the dollar after the breakout but it would take something significant to change the near-term outlook.
Rising US yields have driven these moves supported by the economic data. The jobs report was a setback but it will take a lot more to cast doubt on the recovery. Especially against the backdrop of an impending massive stimulus package.
The dollar index formed an inverse head and shoulders in recent weeks and a break above 91 took out the neckline, which could be a bullish development in the near-term for the greenback.
This is naturally bad news for the yellow metal, which had been struggling to generate much upside momentum in the first place and a move below $1,800 and the 200/233 day SMA is a further warning of tough times ahead.
A break below $1,765 could see support tested around $1,750, with the next major support level below then being $1,700.
We could see a pullback in the dollar after the breakout but it would take something significant to change the near-term outlook.
Rising US yields have driven these moves supported by the economic data. The jobs report was a setback but it will take a lot more to cast doubt on the recovery. Especially against the backdrop of an impending massive stimulus package.
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