Gold has fallen into its bearish area on the daily chart, between the lower blue and green bands. The Bollinger bands are also starting to diverge (black ellipses) after narrowing (vertical blue rectangle). This behaviour suggests an expansion in volatility. If this is so, and the precious metal holds in the current zone, the gold price will likely be under pressure. Market participants prefer the greenback for safety, given the rise in yields and expectations that the Fed will front-load its rate hikes in the coming months. Technically, the RSI is still within acceptable limits, which implies that there is still room for downside before the current swing becomes oversold.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.