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Blog

Date:
10th Mar 2021
Author:
Dalmas Ngetich, for CryptoAltum News Team

Gold recovers but The Pendulum Swings in Favor of Bears

Gold prices, on Mar 9, reclaimed $1.7k, adding $35, but analysts remain skeptical of the rebound. Fundamentals, especially the $1.9 trillion stimulus package's approval and an easing U.S. dollar may prop the yellow metal. However, technical candlestick arrangements favor sellers. Besides the U.S. government's fiscal support, shifting sentiment, including falling coronavirus infection rates and better coronavirus administration, injects momentum to USD buyers.


Details: 

A blend of several fundamentals combine to fan the USD rally, which eased on Mar 9 as government bond yields contracted. Above all, the risk-off environment, a steady stock market, and the availability of options seeking higher returns offered by cryptocurrencies may clip gold bugs, deflating their optimism in the short term. Therefore, while the price pendulum is swinging in favor of gold buyers in the first half of the week, a follow-through reversal may wreak havoc in the second half.


Impact on gold prices: 

Bearish. Technically, traders may find shorting opportunities with every high. However, on the more optimistic side, gold prices may as well rebound strongly, reversing the over $200 losses of the first two months of the year. The slide builds on Nov 2020 triggers and shifting global sentiment due to the coronavirus vaccine. 


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