Why The Gold Price Crashed Yesterday

November 23, 2021

Why the gold price crashed yesterday:

  1. Re-nomination of current Federal Reserve chairman Powell for a second term implies policy continuity.
  2. Inability to trade over $1850.
  3. US dollar Index continues to rise.
  4. Crude oil trades with a softer bias. Inflation expectation is softening before Christmas.

Resurgence of coronavirus in Europe and imposed lockdown implies that European central bank will not raise interest rates for a longer period than expected. Euro will continue to fall unless backed by strong economic fundamentals. Resurgence of covid in Asia and USA (if any) will only create asset bubbles as central banks will ignore inflation for growth. Interest rate hikes (of next year) will be get delayed and the multiplier effect. One needs to keep a close watch on coronavirus trend in nations in northern hemisphere before Christmas. The Gold price fall will be limited on higher safe haven demand due to fear of covid imposed lockdown.

There will be a change in the Federal Reserve team next year except for the chairman. Interest rate stance will be the key for bond yields and US dollar index. Trader focus will be on tomorrow’s US economic data releases and various US November jobs numbers next week.

Tomorrow’s close is the key. Trend of gold and silver after London AM Fix is the key.

Spot Silver: Spot silver has to trade over $23.55 till 3rd December to be in a short term bullish zone and rise to $25.25 and $26.30. (a) Silver will crash only if it trades below $24.003 today to $23.55 and $22.60.

COMEX GOLD DECEMBER 2021 – current price $1807.90

  • Moving averages: 50 day: $1790.70
  • Moving averages: 20 day: $1792.70
  • Moving averages: 300 day: $1820.70
  • There is a triple top in gold this year around $1880.
  • Wider trading range is $1772.40-1880.
  • Gold will break free from $1772.40-$1880 zone and from a new trading range by next week.
  • However failure of comex gold February future to break $1909.10 before FOMC meet on 15th December will result in a crash to $1693.20 and $1665.70.
  • Right now trend is neutral BUT gold has to trade over $1790.70 to be in a short term bullish zone.

About the author

Chintan Karnani

Insignia Consultants

Insignia Consultants -- Web:  www.insigniaconsultants.in

Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees  have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. All analyses used herein are subjective opinions of the author and should not be considered as specific investment advice. Investors/Traders must consider all relevant risk factors including their own personal financial situation before trading. Website www.insigniaconsultants.in. Prepared by Chintan Karnani

Disclosure: Members, employees, directors, clients and all other people associated with “Insignia consultants” do trade in MCX metals and energies. They may or may not have positions on the trading strategies mentioned in this report. They may also have open positions in MCX metals and energies futures in trading strategies other than those mentioned in this report.

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