Gold Price Pressure Mounts as Crypto Rally Accelerates
Gold price (XAUUSD) is under pressure today as the rotation to better-performing cryptocurrencies continues. The metal is trading at $1,872, which is where it ended last week. Silver too is down by 0.62% while copper price has dropped by 0.23%.
The price of gold is wavering mostly because most traders are now shifting their holdings to digital currencies like Bitcoin, Ethereum, and Ripple. The three currencies rallied to multi-year highs during the weekend.
Notably, the weaker dollar has not helped to ameliorate the problems facing gold. The dollar index, which has an inverse relationship with gold, has dropped by 0.15%. This decline is because several countries are on track to start Covid vaccinations.
Later today, gold will react to the latest flash manufacturing and services PMI numbers from the US and European countries.
Gold price technical outlook
Turning to the daily chart, we see that gold price is close to forming a double bottom pattern at $1,847. Also, the price is forming a bearish descending triangle pattern that is shown in red. It is also slightly below the 25-day moving average.
Therefore, in the next few days, the metal will likely remain inside this triangle pattern before breaking out lower, possibly below $1,800. That is in line with what I predicted last week.
On the other hand, a move above the upper line of the triangle will invalidate the bearish thesis.