Gold Price - A Tale Of 3 Charts
London (May 2) On April 17, gold reached its highest price of 2017 when the active month COMEX June futures contract hit $1297.50 per ounce. Gold had so much going for it at the midpoint of last month. The U.S. bombing of a Syrian airfield, increasing tensions on the Korean Peninsula, and the French election that will determine the future of the euro all combined to inject fear and uncertainty into markets. Gold moved to the highest price since November 2016, and it looked set to break above $1300 per ounce.
However, the yellow metal began to correct lower, and other precious metals prices fell like stones with silver and platinum performing much worse than gold on a percentage basis throughout the final two weeks of April.
On the first day of May, the selling in the precious metals sector continued, and now gold finds itself in a position where it may face a much deeper downside correction. Gold is no stranger to corrections. After the presidential election in the U.S. in November 2016, the price of the precious metal slid from $1338.30 to lows of $1123.90 in December, a decline of 16%. Now gold is once again finding itself at a crossroads with the daily, weekly, and monthly charts offering differing signals for the metal that is the most precious commodity of all.
Gold at a crossroads
On May 1, gold hit a low of $1254.90 per ounce, the lowest level since April 11 and just 20 cents or two ticks above the lows of that day. However, gold closed very near the lows of the session and under the $1258 per ounce level.
There continues to be a tremendous amount of uncertainty around the world, which should be a positive for the price of the yellow metal. However, over recent weeks, markets have chosen to ignore risk and stocks have risen to record levels. During the last week of April, the Nasdaq climbed to a record high, and on May 1, it was just below the 6100 level with the Dow Jones Industrial Average around 21,000 and the S&P 500 threatening to breach 2400.
Source: SeekingAlpha
