Precious metals, respectively. commodities react with growth on the fall of stocks in recent days. There is one theory in literature, but also in practice (in markets). As shares fall, capital is shifted into commodities or into more conservative assets, such as bonds.
A technical formation called a symmetrical triangle was created on gold. In this type of triangle, we can not predict where the prize will be, whether down or up. And it helped the bottom line of the last days when stock indices fall. We can see that the price of gold was close to EMA 100, which in this case serves as a strong resistance. If it can overcome it, it is very likely that the market would go above the EMA 200. It will not be far from a simple situation as the market has a lot of resistance before it. However, the triangular formation has more potential.
Let’s also look at the potential risks. Yes, it’s cool that commodities have partially reacted to the decline in stocks, but do not forget that it’s still nothing. The trend would change in the long run after overcoming the EMA 200. We have a strong support at the level of 1216-1212 USD/ounce on the chart. If we break this level, it’s possible to look again at Swing Low.
This analysis serves as educational content and can not be considered as investment advice. In trading, I strongly recommend that you keep money and risk management.