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Mastercard’s shares decline despite upbeat results
News
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News
Is there a golden opportunity with Shopify?
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Investors unimpressed by Microsoft’s earnings beat
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How should you play the NASDAQ 100’s moment of truth?
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Baker Hughes shares decline amid weak Q4 print

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Asset Watch

Has gold run too far, too fast?

 

Tuesday, January 17, 2023

With rate-cut optimism spurring risk assets in recent days, Fed pivot hopes have lifted investors’ spirits. Since a realisation is bearish for interest rates and the U.S. dollar, gold has soared, and billionaire ‘Bond King’ Jeffrey Gundlach sees more gains ahead. On Jan. 10, he said:
“Over the past two and a half years, you haven’t had much action in gold other than sideways. In other currencies, gold has done quite well. And now, as the dollar is weakening, gold is back, and it is above its 200-day moving average […] It’s a reasonably good time to buy gold and own gold. One of my recommendations [for 2023 was] to own gold, which I turned bullish on back at about $1,800 or so. We’re not very far above that right now.”
What should you do? Join the fray or heed the warnings from the technicals?

The price of gold futures ended the Jan. 13 session 10.42% above its 100-day moving average (the blue bars at the bottom), while its daily RSI ended the day near 74 (the purple line in the middle).

 

The vertical grey line near the left side of the chart shows that the Russia-Ukraine crisis pushed gold 11.91% above its 100-day MA, and its daily RSI was nearly 78 on Mar. 8. However, because that was peak momentum, when it reversed, gold suffered greatly.

 

So, with a similar setup present now, is caution warranted until the technicals cool off?


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