ZuluTrade Blog

Who is right? Gold or Equities?

Market View | Thursday, February 16, 2017 4:46 AM GMT

We all know there is an inverse correlation between gold and the stock market. Nevertheless, this relationship does not seem to be so strong lately. The markets are at their highs while gold has recovered from the lows of 1100 area. The gold traders have anticipated a possible correction on equities and this gave great momentum to gold, but Trump's election didn’t confirm it. Stock traders believe that Trump’s reforms will help to improve US growth; therefore, stock market will benefit once again. 

Overall, this is intriguing, simply because it cannot last for long. So, stocks and bonds will reverse or precious metals will fade soon or later. 

Today we are expecting the Jobless Claims and Housing Permits. We should pay attention on the EU summit early in the evening.

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 Source: ZuluTrade's Calendar

XAUUSD Technical View 

Reviewing the daily timeframe, Gold seems to be stabilized above 1220 support. Yesterday’s daily candle looks bullish and prices are heading to test recent highs. If price succeeds to break out the 1240 resistance then it may potentially target at 1270. The buyers should be cautious below 1220.



Going to hourly timeframe, there was a break out of the blue channel and a retest of the upper trendline. If this is valid, it gives a potential target at 1245 area. Short-term support is at 1225 area.


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