The technical omens do not look good for gold lately, with technical analysts sighting the inauspicious “death cross” on their charts. As gold’s 50-day moving average crosses below its 200-day moving average, this augurs the coming storm of a major sell-off ahead. This is the first time this “dark mark” has shown itself in more than two years, says Craig Erlam, senior market analyst at Oanda, in a market update.
The relationship between investors and gold is like that of a mother and her prodigal son. In good times, the son resents his mother’s influence and seeks out worldly pleasures by carousing with his dissolute friends. But when he gets into trouble, it is back into the warmth of his long-suffering mother’s arms that he flees to for refuge and comfort.
As the Covid-19 pandemic turned the world upside down, investors clung on tight to “mother bullion’s” apron strings as the fate of the global economy hung in the balance. Gold prices soared beyond US$2,000/troy ounce ($2,649.76/troy ounce) for the first time in August 2020. But with the post-pandemic recovery seemingly underway, investors have once more forsaken gold’s maternal embrace for more seductive propositions elsewhere.
