Author Archives: Helder Mello Guimares

     

 

 

Long Term Technical Backdrop Constructive

After a challenging Q4 in 2016 in the context of rising bond yields and a stronger US dollar, gold seems to be getting its shine back in Q1. The technical picture is beginning to look a little more constructive and the “reflation trade”, spurred on further by expectations of higher infrastructure spending and tax cuts in the US, has thus far also benefited gold.

From a technical perspective, there are indications that the low at $1045.40, incidentally printed just ahead of the first Fed hike in December 2015, was significant and now provides medium-term support as indicated by the price channel in the chart below.

 

Gold, long term – long term lateral support was tested in late 2015 in conjunction with a positive RSI divergence – click to enlarge.

 

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