In the early morning trade, August gold is trading slightly down at $1,270 and continuing its selloff that started late last week after the US dollar strengthened to new contract highs on Thursday. If you’re a technical guru and believe in moving average death cross (when the 50-day moving average crosses below the 200-day moving average), then you can say this technical pattern caused more sellers to come into the market and cause a further selloff based on technical momentum. After a five-day selloff, one can say the gold market is extremely oversold and with the US dollar coming off its weekly highs the shiny might see some buyers at these levels. Furthermore, with new tariff threats on the US from around the globe and with the fears of the new state internet taxes passed by the US Supreme Court yesterday that the US dollars might stay under selling pressure, which will also give investors and traders alike to buy gold down at these levels. Lastly, reports from the ECB to the US Feds are showing signs of inflation and a reading that came out yesterday showed a 30-year high fear about inflation. I believe this is another reason to see gold buyers at these levels.
If you take a quick look at the daily August gold chart, you won’t see bullish technical indicators anywhere, so I really believe the buying will have to come from fundamental news stated above but the bears are clearly in control of this market at this point.
Gold Aug ’18 Daily Chart