The rise of DXY and Brent Oil gave birth to negative atmosphere in markets as these cases are interpreted as new reasons for the FED to be more hawkish to continue interest rate hikes. Meanwhile, the speculations of increasing interest rates up to 7% turned the markets into red as expected.
While there is a slight increase in the price of Bitcoin, Ethereum, XRP and some other coins in the crypto ecosystem, NASDAQ, S&P and precious metals do not follow the good vibes in crypto. Basically, crypto's own narrative, the Ethereum Future ETFs, has driven the market.
Though the dominant expectation from the FED is to make one more interest rate hike and start lowering the rates in 2024, the story is not enough to push the precious metals higher.
We cannot confirm it in the mainstream media but there are some videos from Ghana regarding a large amount of gold found by local people.
Some people asserted that it might be perceived as a negative story to affect the market. Also, remember the time when people were discussing space mining and the possibility of space gold being transmitted to the world.
If this is the sole reason for the drop, I do not think this is logical.
Personally, when I see such hilarious news regarding Gold, Silver, Bitcoin, Brent Oil, and Natural Gas, I start making small purchases when the price plunges.
Another reason for the drop is that the price of gold broke below the 200-day moving average.
Gold traded below 200-day moving average is a big problem. The chart was pretty bearish for around 2 weeks because of the test to the downtrend and rejection from here.
When the downtrend was strong enough to reject the trials, then the price of the asset starts dropping as it happened in Gold.
Weekly support is getting closer to the price and they will meet around 1820 - 1830 in the worst case scenario. 200-week support from moving average is likely to be a very strong buying level for gold investors.
My expectation is a spike from the 128-week moving average prices around the current states. I do not want to say this is the local dip but I will adjust my porfolio according to my belief.
Final chart is monthly basis.
If the price of Gold can stay above $1855 to be above 20-month moving average, this would be a good sign for the investors to be more courageous. Yet, I do not think it will happen in 40 mins.
If the support does not work and the price keeps dropping, next target is likely to be $1800 with 50-month moving average (dark blue line). With a simple calculation, I am okay with 3% - 5% possible drops in a bearish scenario. Would it happen? it is always possible but I do not think the bulls will let the price drop as low as $1800.
Gold is a different kind of investment with its own dynamics. I've been into this investment for around 3 years and I made nice gains via precious metals. When the central banks want to dominate the markets and shrink them with monetary policies, there is no possibility for the markets to stay strong against the massive sell orders. However, if a product is fundamentally strong, then you can see every purchase as a higher return opportunity.
Like increasing the amount of Bitcoin slowly but firmly, I am applying the rule to Gold and Silver. If you are sharing the same vision with these ancient values, have an eye on the charts.
What do you think about the performance of Gold in 2023?
Share your observations below 👇
Hive On ✌🏼
