[Precious metals] [Gold] Gold short term price action is negative ?

Gold

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At the time of writing this post gold is trading at $1860 down from its high of $2070 from 2 months ago.

It has been in a great downwards selling pressure since 8th March,2022 following the global sell-off of securities.

If you pull up the daily chart for gold things seems ugly with a dodgy downwards price action.

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A strong downtrend line can be seen with $1721 as the only strong buying zone.

More bad news at the FED

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Federal Reserve interest rates which directly affect the liquidity of world markets by making borrowing harder and more expensive which in turns drives the prices of securities lower are set to be increased by 50 basis points again.

Remember, Fed has raised rates by 50 basis points and the stock market is already down 15%, Gold is down more than 10% with a bloodbath in crypto.

With that said,

Fed minutes released Wednesday indicated that officials are prepared to move ahead with multiple 50 basis points interest rate increases.

Things are becoming harder and harder. This all just to control inflation raging at 8.3%. LOL
They are trying to control these inflation figures by increasing 0.50 % rates is like trying to put out a fire by only using 500 ml water bottles. It ain't gonna work.

US 10 year yield

The most famous US government bond with 10 year maturity date currently gives 2.74 % per year as interest payment. Keep in mind this after the rate increase. It used to give around 1.12 % just a year ago...!!

This results in negative return of 5% post inflation....!!

Even after this the bond is purchased with billions and billions of dollars. What a rational and totally logical economic system we have.

It'll be very interesting few months to see how everything pans out.

That is it for today
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Peace out.

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