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Has gold lost its glitter?

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Gold Chart 28 May 2012

The recent hard sell off in gold which started on 29th February when the price fell over $100 has been attributed to a number of things, including hedge funds taking profits as well as a strengthening US dollar.

Since then the price of gold has continued to fall at a steady pace despite the problems in the eurozone. This has surprised many traders who would have expected gold to rally in such turbulent times.

However, this general sell off has also been mirrored across the market with just about every asset class selling off in the past few weeks. The old adage of “sell in May and go away” has never seemed so appropriate.

But what of the future and has the recent pullback in the gold price simply been as excuse for many to buy back into this market?

Looking at our daily chart for the June Comex contract this would not appear to be the case as the trend down since early March looks set to continue for a while longer. This is confirmed by our Hawkeye indicators which are all still firmly red. However, gold bulls can take some comfort from this chart for two reasons. First we have two support pivots at the $1530 price point and second the red trend on the chart has actually started to flatten, suggesting that the gold price may be preparing to enter a period of sideways congestion. However, whatever happens in the gold market all will be revealed on our daily gold chart.

If you would like to learn more about my gold analysis and the trading tools I use just drop me an email at anna@hawkeyetraders.com

Have a great day’s trading.