Gold Tumbles $27 Lower

As US Consumer Confidence Jumps in June

(June 29th, 2021 - Skerdian Meta)

Gold has been on a declining trend since August last year, after cryptocurrencies got some of the action in the safe-haven markets, turning the demand for traditional safe havens down. As a result, gold fell off the record highs above $2,000, and lost around $400 until the end of March.

But the decline stopped as the USD turned bearish again, and since GOLD is quoted in USD, it started to rally again after bouncing off the $1,670 level twice. It pushed above $1,900, but couldn’t quite get above $2,000, and this month, it reversed down again, after the USD made a strong bullish move, following the FED’s sudden reversal regarding their monetary policy.

Gold found support at the 200 SMA (purple) on the H4 chart above, but the 20 SMA (gray), which provided support in May, caught up and gave it the final push down. The decline picked up pace, with gold breaking below all moving averages, and during this week it has mostly been trading sideways, with the USD situation now sort of unclear, following the FED’s comments, in an attempt to play down their monetary policy reversal, with a change in tone from dovish to hawkish.

Although, another moving average came into play and Gold resumed the decline, losing around $27 cents just today. The 50 SMA (yellow) used to be the ultimate support level in May but it seems that it has tuned into support now, after pushing Gold down and breaking the 1-week range. So, down goes Gold and a retrace to the 50 SMA would be a good place to go short on XAU/USD.