Metals News
Watch out! Gold continues to rise with "trap" technical indicators have sent out overbought signals
Jun 5,2019
Source:Golden net
The content below was translated by Tencent automatically for reference.

SMM News: gold prices continued to rise on Tuesday as the dollar weakened and Treasury yields rebounded slightly. European bond yields have rebounded more than US Treasury yields, paving the way for higher gold prices.

The Fed sent a dove signal on Tuesday. Richard Clarida, vice-chairman of the Fed, said the Fed needed to assess the upside-down of the yield curve and take it seriously; the inverted yield curve needed to be constantly analyzed because it predicted recent recessions. At present, the yield on the 10-year Treasury note is close to 2.15%, while the yield on the three-month note is close to 2.30%, which is part of the so-called inverted yield curve. But Clarida did not say how long the yield curve would have to hang upside down before he could take it seriously. Separately, Fed Chairman Jerome Powell said in a speech on Tuesday that the Fed is closely watching the recent escalation of trade tensions and will respond or cut interest rates if the US economy starts to shrink.

Technical analysis

Gold prices continued to rise, close to the resistance level near February's high of 1346.74 in February 2019. Short-term support is about 1292 near the 10-day moving average. At present, the 10-day EMA has a 50-day EMA, which means that there is plenty of potential for short-term rise.

As rapid random indicators continue to rise, the short-term kinetic energy of prices is positive. However, the current reading of 94 for the fast random indicator is higher than the overbought trigger level of 80, which may herald a correction. The RSI index is also rising and the reading is 72, which is also higher than the overbought trigger level (70), which may indicate a correction. The medium-term momentum of gold prices remains optimistic, as the MACD column shows an upward trend.

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