Gold: The core trend stays seen up - Credit Suisse
19.08.2020, 10:53

Gold: The core trend stays seen up - Credit Suisse

FXStreet reports that economists at Credit Suisse continue to look for a potentially lengthy consolidation phase in gold to emerge after the move to the core base case resistance at $2075/80 but with this phase still seen as a pause within the core longer-term bull trend. 

“Gold is seeing its expected consolidation following the move to our base case objective of $2075/80. Although we continue to see the core long-term trend higher, reinforced by falling US Real Yields and a falling USD, we suspect there is scope for a more protracted consolidation phase to unfold first.”

“At present, our bias is for a cluster of supports at $1867/37 to ideally hold further weakness, which includes the 23.6% retracement of the rally from the 2018 low. Should weakness extend, we would see scope for a deeper setback to $1765, potentially $1726. Post this phase we look for an eventual move above $2075 with resistance seen next at $2175, then $2300. Whilst we would look for a fresh consolidation at this latter level, a direct break can see potential trend resistance at $2417, with scope seen for $2700/20 over the longer-term.”

“It is worth noting that monthly RSI has reached its extreme levels seen in 2006 and 2008 adding weight to the view for a lengthier pause in the bull trend. Indeed, in the 2001/2011 bull market the two major consolidation phases (2006/2007 and 2008/2009) lasted 16 and 18-months respectively. A similar length of consolidation at this juncture though is not our base case for now.”

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