GOLDWELL：Daily Market Recap – GOLD Falling inflation expectations threaten gold’s recovery run

The price of gold has benefited relatively well from the rise in inflation expectations and the fall in long-term bond yields (against a backdrop of CENTRAL bank policy normalization and peak growth in the major economies) in recent weeks. Nevertheless, gold prices could now experience a correction in the coming weeks given the recent decline in commodity prices.

A drop in commodity prices, and thus inflation expectations, would be particularly damaging to the gold price, as it would improve the long-term economic outlook and thus long-term rates. The rise in long-term rates combined with the fall in inflation expectations would lead to a significant rise in real rates, which the price of gold would not appreciate.

From a technical perspective, gold's trend was bullish in recent weeks, but the market seems to be struggling to make further progress since it rallied to $1800 last week. It must be said that gold is back near two major resistances: the double top at $1834 and the medium-term bearish oblique that runs through the August 2020 and May 2021 highs. This price zone around $1830 would be a technically interesting price level to sell in anticipation of a real rate hike.

(Chart Source: Tradingview 02.11.2021)

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.