Gold prices
Gold price had a hard time breaking above $1,850 and risks a massive reversal on stronger USD. The NFP report last Friday disappointed, showing a weak labor market and a huge gap to fil to reach pre-pandemic levels. As such, the U.S. dollar reversal may accelerate this week, and the price of gold cannot remain insensitive to it.
In fact, we can attribute the weak dollar theme to the bounce in the price of gold. The yellow metal rallied from $1,760 on the back of a weak dollar. At the same time, stocks made a new all-time high, the EURUSD reached close to 1.22, and Bitcoin almost reached $20,000.
At this point, the price of gold looks vulnerable, and a correction may be in the cards. After three attempts at the $1,840 level, the market looks like it has formed a triple top. If that is the case, bears may want to stay on the short side with a stop-loss order at $1,850 and targeting a move back to the $1,760 level.
Once again, we should not forget the reason why gold bounced in the first place – a weak U.S. dollar. Therefore, a dollar reversal should put pressure on the price of gold, and the triple top here offers the perfect setup to act on such a reversal.
