Gold Analysis Update 7th July 2012
The price of gold experienced its second downside day, after the U.S. dollar gained across the board, following the under par NFP figures on Friday. Negative economic data can often see support for gold, but a weak euro and strong dollar dragged the precious metal down. Euro weakness is negatively impacting gold through dollar strength.
Any prolonged labour market slowdown could drastically impact the commodities markets. Crude oil (August contract) dropped over 3.5% and further downside appears to be a strong possibility. August delivery gold (GCQ2) dropped almost 2% on the daily basis and gold lost 1.6% over the week. Silver likewise shed 2.4% on the weekly basis.
Gold Technical Notes
- Gold is at present caught in a triangle consolidation pattern as can be seen on the daily and weekly timeframe charts below.
- This comes in the context of a long term uptrend dating back to 2001.
- Price is oscillating between the weekly 100 and 20 period SMA.
- A breakout of this triangle consolidation setup could potentially set the near term bias for gold. Price action around the upper and lower trend line is key.
Gold Daily XAUUSD
Gold Weekly XAUUSD