Gold Price Retreats as Rotation to Bitcoin Intensifies
Gold price (XAUUSD) is in a tight range today in reaction to the failure of Judy Shelton to get votes for a Federal Reserve Board position. The metal is trading at $1,1882, which is where it was yesterday.
Judy Shelton, a nominee by Donald Trump to become the next board member of the Fed failed yesterday after Mitch McConnel failed to get the votes. Some Republican senators were not in Washington while some, like Mitt Romney and Susan Collins, voted against the nominee.
Shelton was a controversial nominee to the Fed because, in the past, she has called for the return to the gold standard.
Gold price is also falling today, partly because of rotation from precious metals to cryptocurrencies. Yesterday, the price of Bitcoin – often known as digital gold – rose to a three-year high of more than $17,000.
At the time of writing, Bitcoin is trading at $18,180, which means that it is less than $1,000 below the all-time high of $19,700. Other digital currencies are also in the green, with Ethereum and Ripple rising by 2.90% and 0.45%.
Gold price technical outlook
On the daily chart, we see that the price of gold has been in a relatively tight range in the past few weeks. The price is trading at $1,883, which is slightly below the upper side of the descending triangle pattern. It is also a few points below the 25-day moving average and above the red support at $1,850.
Therefore, for today, I expect that the price of gold will remain in the current range. In the near-term, however, the price will likely break out lower, to potentially below $1,800. This is because a descending triangle is usually a bearish sign. On the other hand, a move above the upper side of the trendline will invalidate this trend.