If last week gold left the door open for any bullish stretches, this time it could have closed it permanently.
To understand what is happening to gold prices, we point out that it was since December 2016 that there were no four consecutive weeks with a closing lower than that of the previous week. Furthermore, a week with such a significant decline has not been seen since June 2021.
The cause of this gold debacle is linked to the strength of the dollar which seems to have no limits. Suffice it to say that the dollar index has reached levels that it has not seen for about 20 years. Additionally, the Fed’s rate hike caused a pause on a possible rise in the price of gold. Hence, gold is a victim of dollar strength and risks further falls.
Before moving on to graphical analysis, a statistical note. It ended an April that should have been bullish for gold, but unfortunately it did not. The month of May, on the other hand, presents many uncertainties as the probability of closing higher is only 53%. In June, then, the probability that the month is positive for gold is only 40%.
Gold is a victim of the strength of the dollar and risks further falls: the indications of the graphical analysis
L’gold (price in real time) closed the session on May 13 down 0.90% compared to the previous session at 1,808.2 dollars. The week, on the other hand, ended with a drop of 3.96%.
Daily time frame
Gold continues to descend and, after the close on Friday, it has no obstacles on its way to the 1st price target in the $ 1,757.4 area (1st price target). A daily close below this level, then, could cause a bearish acceleration that could push prices up to the II price target in the 1,604 dollar area. The maximum bearish extension, on the other hand, could go to the $ 1,450 area.
Only a recovery of the $ 1,562 area could give new strength to the bulls.
Weekly time frame
The weekly close may also have dealt a blow to bulls’ hopes. As can be seen from the graph, in fact, the weekly close was lower than the very important support in the $ 1,817 area (I target price). Unless there is an immediate recovery, therefore, prices could move towards the next target in the $ 1,631 area (price target II). The maximum bearish extension, on the other hand, could go to the $ 1,450 area.
The Milan stock exchange could be ready for a bullish turn thanks to the indication of these signals from the Ftse Mib