Gold prices are being watched closely for potential low volatility, and market analyst Matt Simpson says a combination of sentiment analysis suggests we may have seen it. We have prepared Matt Simpson’s gold price analysis and market comments with his own narration for our readers.
“Currently, we expect gold to rise against major currencies”
Kriptokoin.com conditions for gold traders in the last 48 hours turned positive. Risk-off flows from the EU’s decision to ban Russian oil imports helped bolster prices ahead of yesterday’s FOMC meeting. Given that inflation remains rampant and the Fed is not as aggressive as some preventive bulls hoped, some will once again see gold as an inflation hedge.
Gold’s rally isn’t just a story of a weaker dollar as it rallied against all major currencies after the Fed meeting. But it also performed well overall this year. Gold even outpaced shining silver with a 13.3% YTD rally.
Also, major speculators have been cutting longs and increasing shorts in recent weeks. And now is probably a time when they will try to reverse those positions. In summary, we currently expect gold to rise against major currencies.
Gold prices technical analysis: A close above $1,920 is significant
A quick look at our gold basket, a key low swing for gold shows occur. Equally weighted against the currency majors, the gold basket aims to remove the US dollar’s dominance over gold to better reflect the underlying trend.
Encouragingly, we can see that it remains in an overall bullish trend, with a potential bearish on Monday just above 2.040. Today’s price action in Asia is definitely bullish and we are currently on the right track for the stochastic oscillator on the daily chart to form a buy signal.
Gold prices extended their bounce from the 200-day eMA and rose to a 4-day high. Also, it broke above the 1,880 resistance zone, which we marked as an important level, re-igniting our uptrend.
Naturally, the post-FOMC rally met resistance around 1,900 but as long as prices stay above the 1,880 region, we now expect a break above 1,920 to signal a continuation of the trend. And a close above 1,920 will be significant as it sees prices above last week’s high and June 2021 high.
