Technical analysis update: XAUUSD (19th May 2021)

Our previous price target of 1875 USD was reached. Because of that we would like to update our thoughts on next price action for gold. Gold climbed up approximately 12% in last 72 days. We think gold reached its temporary top as we think its currently overvalued and ready for correction. Temporary bearish case is supported by price being too far away from its 20-day SMA and by temporary peak in RSI. However, we expect bullish trend of higher degree to remain intact. Currently, we do not dare to give you any price target for gold as we deem it hard to estimate extent of correction.

Disclaimer: This analysis is not intended to encourage buying or selling of any particular securities. Furthermore, it should not serve as basis for taking any trade action by individual investor. Your own due dilligence is highly advised before entering trade.

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Here are our previous thoughts on gold that led to our price reevaluation:

16th April 2021

6th May 2021

17th May 2021

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Rapid fall in cryptocurrency supports rotation into gold. If this downtrend in cryptocurrency continues then correction for gold will be very shallow and we expect it to reverse back up very soon.

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Correction failed as price stopped its decline around 1852 USD per ounce. This reversal in price direction happened due to big selloff in cryptocurrency market that supported rotation out of cryptocurrencies and into gold. However, one should be wary as technicals for gold still remain overvalued.

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