Dow high resulted in gold crash

Dow again tested lifetime high by posting a good healthy 28088 in today’s chart. Since last week DJIA index posting new lifetime highs which is resulting pressure in gold. due to nature of relation between equity market and gold , xauusd is in under lot of pressure despite giving breakouts on chart. Major selling is from DJIA index & dollar index which is also in good positive zone as stock market continues to test new highs.

Last week FOMC chairman Powell mentioned there wont be any interest rate change if economy continue to rise with this kind of pace. In his testimony he stated that fed is satisfied with current growth and major factors such as trade war with China is not effecting US growth. After fed chairman testimony Wallstreet recovered from lows and continuing its winning streak since last week.

According to many analysts we may see more highs before we see some major fall. Gold is continuing to sustain despite new lifetime highs from Dow. We may see more highs in Dow as market is very optimistic due to holiday sessions but we may see some big decline after holiday period. I will cover this later in detail.

Last week China & US confirmed again that trade talks in progress and we may see fine print of an agreement between both countries very soon. But still we do not have any clarity regarding trade deal.  Trump’s impeachment also started which could influence markets in big time. If there is any heat on presidency then we may see depression & not recession this time. Stock markets around the world had a dream run since market recovered from recession of 2008. So expect a bigger recession this time if we goes into one.

For now gold is trading at 1464$. Good support in xauusd stands at 1458$. If trader break and sustain below 1458$. Then expect good pressure in comex gold till 1450$- 1442$.

Resistance in gold chart stands at 1471$. If trader breaks and sustain above 1471$. Then expect good rise in gold till 1479$ – 1487$.

Conclusion: Currently gold is in weak zone , avoid buying on these levels.

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By marafat