Gold Prices Rebound, But Experts Warn of Fragile Market
As the European market opened on Thursday (February 15), gold saw a short-term rebound of over $3, reaching the $1993 mark. This recovery comes after a recent plummet, but experts warn that the overall bullishness of gold is still fragile. Overseas analysts are particularly bearish on gold prices, with important supports at $1973 and $1965, and resistances at $1993, $2000, and $2024. This sentiment could shift based on upcoming U.S. retail sales data.
Dhwani, an overseas analyst, stated that gold prices are likely to remain in a “sell on rebound” trade due to technical factors that favor sellers. She emphasized that gold needs to reclaim the $1993 level to have a chance for a meaningful comeback. Specific bearish technical signals include the 14-day relative strength index (RSI) remaining below its midline and the 21-day and 50-day moving average bearish crossover, both supportive of gold sellers.
Additionally, the upcoming U.S. retail sales data is expected to be weak, which could lead to expectations of an interest rate cut by the Federal Reserve, subsequently affecting market sentiment for gold. This comes as the U.S. dollar adjusted with Treasury yields.
Furthermore, renowned financial best-selling author, Robert Kiyosaki, has taken a surprising stance on precious metals. In a tweet, he warned that gold may fall below $1,200 but also expressed optimism about silver, stating that it will take off. Kiyosaki’s warning about gold reflects concerns about the rising U.S. debt and the risk of a U.S. debt crisis potentially triggering a default on Treasury bonds.
At this critical juncture, the market’s focus will continue to be on U.S. retail sales data, initial jobless claims, and speeches by Federal Reserve officials to determine the likelihood of an interest rate cut. Ultimately, gold’s performance will be heavily influenced by the decisions made by the Federal Reserve and the impact on the U.S. dollar.