Gold Price Foreast: Looming Death Cross For Gold

[MongiIG]

Jun 30, 2022 | DailyFX
Justin McQueen, Strategist

GOLD ANALYSIS AND NEWS:

• Gold hits two week lows as USD rises in month-end
• Looming Death Cross For Gold

LOOMING DEATH CROSS FOR GOLD

On the technical front, gold has continued to hold an 1800-1880 range. Despite brief attempts to break 1800, gold has failed to close below the psychological level since the beginning of the year. That being said, a death cross is looming, which is where the 50DMA falls below the 200DMA with the theory suggesting that this is a bearish signal. However, I am normally sceptical of these indicators working consistently, the same goes for golden crosses (50DMA breaking above 200DMA), which shouldn’t be a sole reason to sell or buy. As such, I looked back at the prior occasions a death cross occurred in gold since 2010 and found that, while there is a tendency for gold to drop in the very short term (a few days) over a longer period of time (1-month), it is near enough a 50/50 as shown in the table below.

Source: Refinitiv, DailyFX

GOLD CHART: DAILY TIME FRAME

Source: Refinitiv