Ultima Markets | GOLD Analysis: Stagflation risks rise, gold is the best choice

Fundamental Analysis of GOLD

GOLD Key Takeaways

• US recession risk: Currently, the US dollar, US stocks and US bond yields are all moving downwards, and almost all gains since Trumps election have been lost. Market expectations of recession are rising rapidly. Gold may be the best choice for many assets in the current economic environment.

• Gold performance in the early stage of stagflation: Looking back at history, there were two typical “stagflation” periods in US history: 1974-1975 and 1979-1982. Gold performed steadily during the “stagflation” period, especially in the first year of stagflation.

Technical Analysis of GOLD Daily and Hourly Charts

GOLD Daily Chart Insights

(GOLD Daily Price Chart, Source: Ultima Markets MT4)

• Stochastic oscillator: Both the fast and slow lines entered the overbought area, suggesting that short-term bullish sentiment prevailed. It is worth noting that the fast line shows signs of slowing down, so be alert to the probability of reversal.

• Naked K structure: Gold price broke through the high resistance of 2955 last Thursday, and short-term bullish sentiment was high. The cross star pattern on Friday cannot confirm the reversal for the time being, and yesterday‘s fluctuation range is still within the cross star range. Therefore, today’s market price is more important. If the cross star high is broken during the Asian session, it is worth looking at in the short term, but be alert to the reversal during the London session.

GOLD H1 Chart Analysis

(GOLD H1 Price Chart, Source: Ultima Markets MT4)

• Stochastic oscillator: During the Asian session, the indicator showed a downward trend and was about to send a short signal. The market price is also in a trend of divergence and rebound, suggesting that the probability of breaking through the previous high in the short-term Asian session is not high.

• Lower support: Based on the low probability of short-term breakthrough, investors need to pay attention to the lower support price. The range support price around US$2980 is the first target position for the downward adjustment. If it continues to break down, it is necessary to pay attention to the long-short conversion area near US$2955.

Pivot Indicator Insights for GOLD

(GOLD M30 Price Chart, Source: Ultima Markets APP)

• According to Pivot Indicator in Ultima Markets APP, the central price of the day is established at 2985,

• Bullish Scenario: Bullish sentiment prevails above 2985, first target 3005, second target 3020;

• Bearish Outlook: In a bearish scenario below 2985, first target 2978, second target 2970.

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