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Is $1,850 gold now support?

Commentaries & Views

As the dollar has weakened, gold has found support at $1,850. Although silver has yet to break out and stay above $22.10, a breach of that level looks increasingly probable. The USD continues to look set to retreat to the bottom trendline shown below (originally shown last week). Caution; the macro backdrop remains conducive to sudden volatility in all asset classes. Another close over $1,850 for gold would open the door to $1,885 and then $1,900.

Stocks have not benefitted from the recent weakness in the USD to the same extent that gold has. Truly, gold has been a reliable store of value thus far in 2022 when measured against major US indices. The 200-day moving average in the S&P500 is likely the most obvious place for support in the medium term. Still, with every trader in the market aware and likely anticipating a test of the 200dma, a convincing relief rally may materialize first.

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