Tips for traders, 2 March 2021
The chairman of the Fed, Jerome Powell, recently announced that purchases of assets would continue this year. The plan is to buy approximately $120 billion worth of assets every month for a total of $1.9 trillion in 2021. What can happen next? Many people anticipate the conventional reaction of gold making gains. However, there was no appreciation in the immediate aftermath of the announcement.
One of the factors explaining this is that gold overshot in the previous rally amid the lack of strong fundamentals. Besides that, there are many funds moving into other assets like cryptocurrencies, which are a prominent group of instruments for most millennials.
In the technical view, the price of gold is currently moving within the channel of its downtrend which was created after the all-time high was followed by a lower low. The price has moved consistently near the channel. In the meantime, it might go a bit lower before continuing its upthrust. In the short term, there’s the potential for the price to bounce from around $1,720.