The gold market has rebounded in the last few days after falling below $2,000. However, it remains unclear whether he will continue on his way. Economists at Commerzbank point to ongoing ETF outflows. The technical analyst says that in this process, the $ 1,980 level has proven to be important for the future direction of the market.
Commerzbank: Kin the short term under dA continued recovery is unlikely!
Gold rose above $2,000 after US Retail Sales came in lower than expected. Continued ETF outflows stand as another negative factor, according to economists at Commerzbank. In this context, economists make the following assessment:
Following the inflation data, expectations that the Fed will cut interest rates in the near term have once again decreased significantly. As a result, US bond yields have risen significantly and the US Dollar has appreciated, both of which are negative for gold. Continued ETF outflows are another negative factor. According to Bloomberg, these outputs have reached 76 tons since the beginning of the year. Finally, there was an outflow on 20 of the 21 trading days. Following weak US Retail Sales data, the gold price rose back to $2,000. However, prices are unlikely to continue recovering in the short term.
Technical analysis of gold prices:
Technical analyst Christopher Lewis paints the technical picture of gold this way. Gold jumped from the $1,980 level. So he’s shown some resilience over the last few days. This is an area that will of course attract a lot of attention as it has already been supported. And you’ll notice that I’ve colored it darker on the chart because I think it’s not like a brick wall, but rather an area as a range that extends to the $2,000 level for support. In other words, traders will have to pay close attention to how prices behave in that area. Also, the shiny metal has shown a tendency to bounce so far. It is also worth noting that the 200-day EMA is near the $1,980 level.
Therefore, it adds even more confidence that this field is important. At this point, gold will try to reach the 50-day EMA located at $2,020. If it rises above this level, then it has a chance to rise further. That doesn’t mean it will be easy, and it doesn’t mean it has to happen. But I think this is something that market participants are keeping an eye on right now. So at this point, you need to look through this prism.
Given enough time, if it can break above here, then it could move towards the $2,060 level or possibly even the $2,075 level. If it bounces back and breaks below the 200-day EMA, then it could decline to the $1,940 level. Overall, I think this market continues to be very noisy. But it is also a market with well-defined support that many traders are starting to lean into. Another thing to keep in mind is that there are a lot of geopolitical concerns that could push gold higher, and of course if central banks around the world are going to cut interest rates, it makes perfect sense for gold to do well.
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