Gold Price Analysis – Gold Slumps as Death Cross Signals Downside Risk

Gold Technical Analysis

The gold market has found itself to be a little bit negative in early trading on Monday, as we are starting to get the 50-day EMA breaking below the 200-day EMA, kicking off the so-called death cross. With this, I think we have to look at this through the prism of a market that is struggling, and I do think that longer-term moves could be the way forward if we break down below the $4000 level.

Death Cross and Macro Factors Intensify Downside Pressures

The $4000 level, I think, extends down to the $3900 level, and if that is going to be the case, then I suspect we could see this market drop down to $3500 before it’s all said and done. If we do get a little bit of a rally from here, then I think it should be viewed through the prism of selling signs of exhaustion. I just don’t have any interest in buying gold at the moment.

I think rates and the US dollar are both working against the value of gold long-term. Long term I like it, but we would have to get the situation in the Middle East sorted out, and I just don’t think we’re anywhere near that at the moment, so I think gold continues to slump in this environment. This is a market that is a situation that remains very fluid, and I think bearish in general. I would make it a point to be a trader who uses a small position size, as the headlines continue to see a lot of volatility in risk appetite.

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