Where Did You Gold? – Gold Continues to Move Downwards, Is The Bulls' Reign Over?

After hitting $1,854.90 yesterday, gold experienced a sharp decline to the day’s low of $1,835.50. However, it has managed to pick itself up and gradually move upwards. At present, gold is at $1,842.20. Looking at the technical levels, the Moving Average Convergence Divergence (MACD) shows that the bears have the upper hand, and this is also supported by the fact that gold is currently trading below its 50-day Moving Average (MA), which is represented by the purple line in the chart below. Meanwhile, the Relative Strength Index (RSI) has been on a downtrend and currently stands at 41. 

Source: Yahoo Finance

Analyst Joel Frank from FX Street believes that the bulls will need to breakthrough key resistances at $1,857 and $1,875. Meanwhile, for the bears, key support levels lie at the $1,830 - $1,835 areas as well as $1,780 and $1,760. The current price of spot gold is $1,846.31.

Meanwhile, over in the markets, a risk-off sentiment has overtaken the market as the latest U.S. core Consumer Price Index (CPI) for January came in at 1.4% year-on-year, against December's result of 1.5%. In addition to the lacklustre results, the markets also did not react well to U.S Federal Reserve (Fed) Jerome Powell statement that suggested a weakening of the U.S. employment sector. Traders would most likely also be keeping an eye out for the weekly jobless claims report this week. It is to be noted that the Chinese markets will be closed beginning Friday for the Lunar New Year while the Japanese market will be closed on Thursday for the National Foundation Day.

XAU/USD (as of Feb 11, 2021, 10.15 a.m., GMT +8) - $1,842.20

FOLLOWME XAU/USD User Sentiment (as of Feb 11, 2021 at 10.50 a.m.)

Short – 51.33%

Long – 48.67%

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