Friday afternoon, spot Gold and silver shock lower, the European session at about 21:00, spot gold fell below $ 1840 / ounce; spot silver was once close to the $ 25 mark.
After bottoming out, gold and silver both rebounded, and as of press Time, spot gold has returned to the $1850 mark.
However, the dollar index, which has a strong negative correlation with gold and silver, did not come out of the obvious trend during the day, and the long and short contention was intense.
Risk assets also fell during the European session, WTI Crude Oil futures once fell 3%. However, before the U.S. session, the two oils rebounded significantly and have recovered most of their intraday losses so far.
Fundamentally, the majority of the U.S. Senate Finance Committee voted to approve Yellen‘s nomination for Treasury Secretary, which is now being sent to the full Senate. U.S. Senator Wyden, a Democrat, revealed that the Senate may vote on Yellen tonight.
In addition, the preliminary U.S. Markit Manufacturing PMI for January, released early in the U.S. session, registered a record high of 59.1. Nevertheless, the U.S. index reacted little to this and did not put pressure on gold prices.
IHS Markit economist Chris Williamson said the data showed the U.S. is off to a strong start in 2021, and the new administration will provide a sustainable and supportive environment for stronger economic growth igniting market hopes.
On the technical front, some analysts suggest that the decline in gold and silver earlier today may be more of a technical retracement. Some gold bulls tend to choose to take profits as we approach the weekend. Secondly, as seen in the hourly chart, gold prices are fluctuating in a downward channel formation and the rebound move may be limited by $1865, a level that is the intersection of the 21-hour moving average and the 50-hour moving average.
It is also worth noting that the bearish crossover line formed within the above time frame, when the 21-hour moving average cut into the 50-point moving average from above. Therefore, as long as gold prices remain below the $1865 mark, bearish pressure will remain intact.
On the downside channel trend line, gold price support at $1856 may be tested and below this level at the 100 HMA at $1852 will also be at risk. the RSI index is moving lower, indicating more room for downside.
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