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Gold Hits Highest Level Since 2012, Equities Cautious

ByAxiory
AuthorTomasz Wisniewski
Published 06/24/2020, 07:40 AM
Updated 01/03/2021, 09:10 AM

Buyers could be facing a big problem here; Monday started with huge pessimism which was perfectly reflected in the bearish gap on major indices. This, however, didn’t spook out buyers, they simply started taking advantage of the lower prices and buying again. General market optimism only lasted until this morning. Currently, we see negative sentiment returning to charts.

Let’s start with the DAX which has been one of our frequent targets. Yesterday we mentioned a false bearish breakout and we anticipated that a nice swing would follow. Now, we need to be fair to sellers as Tuesday brought us a false bullish breakout. Today, the price is back below the crucial support level, which brings the DAX back into negative sentiment.

S&P 500 traders were more cautious and the price didn’t break the upper line of the range. Technically we didn’t get a buy signal. Without a signal, there’s no trap. The SPX bounced from the upper line of the range creating a head and shoulders pattern. Based on everything we’ve mentioned, a movement towards the 3075 points seems inevitable.

When stocks are pessimistic gold is optimistic. We also anticipated this scenario that a breakout of the 1740 USD/oz will give a buy signal and it did. The price is now pushing higher and has reached its highest level since 2012 … not bad.

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