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Gold and its biggest drop on 7 Years!
By: Ahura Chalki
Sharp recovery of USA500 despite US-China tensions, even though if closed 0.8% lower yesterday, still it is just 1% lower than its historical high, seen in February.
Donald Trump signed executive orders over the weekend, which would extend some elements of the existing AID package that outmode by end of July. Also, late Monday he said the administration was considering a cut in the tax rate on capital gains, which analysts believe was the fuel of the market rally.
Gold buyers of last week’s got it the best level to save the profit and move the cash into the stock markets, and it ended to Gold’s biggest one day drop in the past 7 years. Downtrend extended today with more than 2% and currently trading under $1910.
Even though if the US main indices ended up with red color yesterday, futures trading in the green zone. Signaling of continuing the trend.
On the COVID front, three days under 50K for new cases in the US brought the hopes back on controlling the situation which helps them have a brighter future despite the disappointing current sentiments. And it must help the sell-off in the safe havens and more support for stock markets.
In the H1 chart, Gold has a strong correction signal. CCI returned upper from -100 level, while RSI scoping up from the oversold area and heading towards 45. 61.8% of its Fibonacci level (From yesterday fell) sitting at $1981 is the key level for recovery, Next trend supposed to be started from the, up or down, it is where yellow metal supposed to make its decision.
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