As in the title. Gold, which was usually negatively correlated with the SP500, has recently changed its style a little and is increasingly often letting traders up the garden path… Gold was a safe haven when stocks were cheap or something could have a negative effect on the global economy. When good moods prevailed and stocks grew, then gold lost its tempting shine and its price fell.
Looking at recent months, Gold was also gaining in value during the strong upward trend for SP500, fuelled by the threat of war over the Strait of Hormuz or the recently spreading coronovirus.
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It is hard to say whether it was SP500 that was growing inappropriately or whether the Gold forgot to correlate with this important index… Anyway, the situation today is such that, in my opinion, we are facing drops in gold.
The condition to go short is to permanently (closing the daily candle below) overcome level 1633. If during this time the MACD creating the maximum enters the drop phase (turns red) the probability of declines will be very high. The supply target may be the nearest support level 1611 and then another 1590.
In the evening at 24 GMT President Trump will have a press conference on the situation in the country related to the disclosure of coronovirus cases. Not from today we know that he pays special attention to the SP500, so we can expect verbal support for the stock market and minimizing the risk to the economy associated with the virus.
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