Credit Suisse has its say on the recent move lower in gold

Geneva (Mar 22)  Swiss investment bank Credit Suisse have had its say on the recent move lower in gold. In a research note, the global investment manager said Gold remains vulnerable to a rise in US Treasury yields and a rebound in the US dollar.

They added "Gold has been losing momentum as economic growth optimism is growing. In recent weeks, the spike in the US Treasury yields, as well as a rebound in the US dollar, also weighed on gold prices. Moreover, a rapid progress with vaccinations and substantial additional fiscal stimulus have boosted risk appetite. Given this backdrop, gold investors are taking a cautious stance, resulting in sharper exchange-traded fund (ETF) outflows,"

"Gold prospects have deteriorated as the US dollar is no longer expected to weaken in the near term and US Treasury yields continue to rise. As a result, our commodity team has lowered gold 3-month and 12-month forecasts to $1750 and $1700 per ounce, respectively," Credit Suisse said.

If we look at the daily price chart of gold futures, it is very clear to see the price is currently in a downtrend. The channel marked by the light red support and resistance lines shows that there has been good support and resistance in this move. At the moment the wave low is from the consolidation between April and June 2020. If the consolidation low breaks then there could be a move to the next support level at the bottom of the chart at $1460/oz although it is some way off. On the topside, the bulls will be looking at $1760/oz as if that level breaks maybe there could be another bull market. For now, the bears are clearly in charge.

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