The gold price is currently rising above an important brand. Gold fell to $ 1,670 on Friday after seeing highs of $ 1,764 on May 18. It is a clear connection. While the stock markets were bullish, gold continued to fall. The first chart shows the increase in the gold price in red-green since last night compared to the CFD-based Dow 30 in blue. Gold rises in time for stocks to slide. It’s the classic risk off trade. A back and forth. If investors see no risks, they are willing to take risks and buy shares, for example. The precious metal is therefore avoided (risk on). But in the opposite case, the risk off trade is activated. This means: out of stocks, into gold. And so the gold price is currently rising above the important symbolic mark from $ 1,700 to currently $ 1,707.
Now the rise in the gold price after the correction?
The second chart shows the falling gold price since May 11th, which is suffering from the strong bull market. Is the turning point now? Hannes Zipfel’s headline in yesterday’s article was “Don’t panic – it’s just a correction!” (read here). Here is an excerpt from a quote: “The current correction in the gold price does not change anything in the overall positive chart picture. It only means that short-term speculators leave the market, clean up the futures market data (red line in the chart: large speculators) and now bargain hunters return to the market. ”
Basic arguments have not changed
The basic arguments as to why the gold price could or should go well over $ 1,800 have not changed with the falling prices in recent days. On the contrary. The central banks print more and more money, the paper money is watered down more and more. The states are getting into debt. In the eyes of more and more people, gold is a stable safe haven. Recently, the fact that stock markets continued to bullish was simply a brake on gold. In the past few days, a great many observers believe that the stock market is currently completely overbought.
The increase after the crash in March and April went far too quickly (here the market commentary by Markus Fugmann about the recent surrender of the skeptics, because the prices continue to rise). If all investors and commentators are only optimistic and the share prices continue to rise despite fundamentally different data, the amount of the fall will increase. The market could be at a turning point right now. The CFD-based Dow has lost 300 points in the past three hours, the Dax 240 points. If things go downhill, the gold price could rise sharply. But you always have to enjoy something with caution. It can increase, but it does not have to. The past few months have shown that not everything always goes according to plan for gold!