Will gold fall below $1800? Bearish sentiment is approaching (with trading strategy)

Gold futures traded higher in Asia on Tuesday. The April gold futures of the Comex Division of the New York Mercantile Exchange, the transaction price rose by 0.19% before the deadline, and the transaction was at USD1826.70 per troy ounce. The previous high was USD1826.85 per troy ounce. Gold is expected to find support at USD1810.10, and USD1848.60 will meet resistance.

Comex silver's March transaction price rose 2.69% to USD 28.062 per troy ounce; March copper transaction price rose 0.37% to USD 3.8407 per pound.

Morgan Stanley expects the price of gold to fall below $1,800 per ounce by the end of the year. At present, the price of gold is trading between the resistance level of around $1850/ounce and the support level of $1800/ounce.

Its asset strategist Andrew Sheets pointed out in the report that inflation is expected to rise in 2021, but this is not enough to support gold prices.

Morgan Stanley’s economists predict that “the U.S. inflation rate will be slightly higher than 2% in the next two years. Therefore, it is not an out-of-control inflation situation that drives gold prices.” The bank said that weak inflation and economic improvement will continue. Suppress gold prices. Sheets pointed out that the current valuation of gold is not very attractive.

Some analysts also pointed out that the rise in the nominal rate of return also pushed up the actual rate of return. This environment also increases the opportunity cost of gold as a non-yielding asset.

Morgan Stanley is optimistic about the U.S. economy, because they expect suppressed consumer activity to be released in the second half of this year.

Morgan Stanley chief economist Chetan Ahya pointed out in another report that the recession caused by the new crown pandemic has cost American households US$400 billion in income; however, the bank also said that consumers have received more than 1 trillion dollars. Transfers in US dollars.

Trading strategy (Source：Trading Central) 

Pivot: 1815.00

Our preference: long positions above 1815.00 with targets at 1831.00 & 1836.00 in extension.

Alternative scenario: below 1815.00 look for further downside with 1810.00 & 1804.00 as targets.

Comment: the RSI is mixed to bullish.

Supports and resistances:

1847.00

1836.00

1831.00

1821.00 Last

1815.00

1810.00

1804.00

Trading Central Strategy Usage Guide

Trend chart reading teaching

1. First look at the time period in the upper left corner of the trend chart (30 minutes / 1 hour / day)

・The 30-minute and 1-hour chart is a daily reference operation suggestion

・The daily chart is an analysis of the market trend in the next 2 to 3 days

2. The blue horizontal line on the trend chart represents the turning point: this point is the turning point of the market trend, the price is rising at the turning point; the price is falling below the turning point, when the price crosses the turning point, it means the trend has changed;

3. The thin red and blue curves surrounding the Candlestick chart in the figure are technical indicators: red is MA20+Bollinger band, blue is MA50; the picture below the Candlestick chart chart is also a technical indicator, blue is RSI and red is 9MA;

4. The green horizontal line is the resistance level for price increases, and is also the target price for setting long orders to make profits; the red horizontal line is the support line for price declines, and is also the target price for setting short orders to make profits.

How to look at the trading strategy

1. [Pivot] is the reversal line of the market trend. When the price rises to the reversal line, you can buy long. Conversely, when the price is below the reversal line, it means that it is bearish and you are better off short.

2. [Our preference] is the main trading strategy, you can refer to the target to exit the transaction or close the position before this target.

3. [Alternative Plan] is Plan B for your reference.

4. [Comment] is a technical analysis of market trends and technical support for trading strategies.

5. [Support and Resistance] Support is the level of support found when prices fall. Resistance is the resistance that prices encounter when they rise. Therefore, it is best to exit before the trend reverses.