BREAKING: Gold spiked 1.4% on Wednesday
What are the short-term and long-term perspectives for the yellow metal?
“The so-called barbarous relic is down over 6% from its peak after an incredible run of ~18% this year. After this pullback, gold prices are now +12.5% year-to-date. By looking at the above chart we might expect the consolidation to last for another few days before a bounce.”
The above excerpt is from the last week’s recap of the gold price action which played out almost exactly as written. I usually do not focus on the short-term price action but when an opportunity appears it is useful sometimes to exploit it for long-term benefits.
Gold prices have broken to the upside the descending trendline which should provide some medium-term relief as US economic data deteriorates.
Unfortunately, the base case is that the US economy will continue to weaken which should benefit the yellow metal prices. Thus, it is a great time to hold gold.
HOWEVER, we have to keep in mind that if a recession occurs and investors will be rapidly selling assets then even gold will fall by 10-15% in the first phase of the sell-off. It has already happened in the first months of the Great Financial Crisis in 2007-2009 and the Covid Crisis of 2020.
Therefore, the key as always will be patience. For more details about what’s ahead for gold click the link below:
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Ivana Gosnik Gorkega ul4 Maribor Slovenia
Ivana Gosnik Gorkega ul4 Maribor Slovenia