Until this morning, gold looked likely to continue to move higher. Today, however, I am seeing bearish divergences in volume and RSI.
The culprits appear to be twofold:
First, China today made some reassuring comments suggesting they want a resolution to the trade war. Gold has been moving higher partly on safe haven demand amidst recession fears, but a trade truce could stave off recession for a while.
Second, US GDP growth today came in 0.2% better than expected, which not only alleviates recession fears, but also makes the Fed less likely to continue cutting rates this year. If we don't get more rate cuts, that would be bullish for the dollar and bearish for gold.
Gold has been on a monster run, and I wouldn't short it yet. Officials have mostly implied that they intend further rate cuts this year. But if you're holding gold, you may want to take profit on a portion of your position here.
The culprits appear to be twofold:
First, China today made some reassuring comments suggesting they want a resolution to the trade war. Gold has been moving higher partly on safe haven demand amidst recession fears, but a trade truce could stave off recession for a while.
Second, US GDP growth today came in 0.2% better than expected, which not only alleviates recession fears, but also makes the Fed less likely to continue cutting rates this year. If we don't get more rate cuts, that would be bullish for the dollar and bearish for gold.
Gold has been on a monster run, and I wouldn't short it yet. Officials have mostly implied that they intend further rate cuts this year. But if you're holding gold, you may want to take profit on a portion of your position here.
