U.S. Dollar Decline -> Impact On Gold -> Time To Load GLD

We saw the sharp decline in U.S. dollar on Wednesday (12 June 2024) and it start to recover on Thursday, so will this decline and recovery help to push gold as high as it could be expected?

On Wednesday (12 June), we saw that US dollar was under attack that it was so strong with the selling pressure that it closed at its lowest in 3 days.

U.S dollar make a comeback on Thursday (13 June), the U.S. dollar finished the session above the red declining line, invalidating the earlier breakdown, which is a positive development.

Although the U.S. currency increased earlier today, it is still trading under the previously broken 50-day moving average and well below yesterday’s high.

Taking this fact into account and combining it with the above-mentioned negative technical factors (the pro-bearish candlestick formation and sell signals from the indicators), it seems that another attempt to move lower may be just around the corner.

If we looked at Thursday’s session for Gold, the bulls have closed up the ranks and used the sharp decline in U.S. dollar to push the yellow metal higher, but it is still not above the previous day close.

But from the indicator, we could expect another action by the bulls to try to push the price of Gold higher today (14 June).

We could see that Gold actually opened at around 2,113 on Thursday with a declining red price gap, before closing the price at around 2,102.

Taking all the above into account, it seems that further deterioration may be just around the corner. This scenario will be even more likely and reliable if the bears manage to close yesterday’s green gap.

While we might see Gold price further deteriorate, we could consider to buy into GLD, because it is currently consolidating and the KDJ is actually showing signs of a breakout to the bullish side.

This will depend whether the bulls is able to push beyond the level that bears are holding on Gold, which is at the 2,102 level.

I personally feel that it is a good time to load up on GLD.

While U.S. dollar might experience a pullback, it should remain strong as Fed comment to have the rate cut only in September might keep the dollar strong.

So for Gold, we could be expecting some investors to invest in safe haven with this yellow metal. Hence, there might be a chance that we see the price of gold deteriorate first then go up.

Appreciate if you could share your thoughts in the comment section whether you think Gold would experience a price consolidation due to the strong US dollar, though we have seen decline in the US dollar.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.