5 Reasons Why Gold XAUUSD and Silver XAGUSD are Falling. US Indices Still Falling. MACD Histogram on cTrader.

In today’s GCI Market Outlook, let’s take a look at Forex Trading on EURUSD, Gold, XAUUSD, Silver, XAGUSD, the S&P500, and the NASDAQ.

Just a reminder that these videos are intended as educational, we are only observing current market conditions, and these are not to be considered as trading advice.

Last week we talked about 3 reasons why the US Indices are falling https://youtu.be/mqEqSAq76-I?si=d2F-w6AL_8YfFFvd

These reasons still hold true, and you can check out the video and the story here.

Here we can see the decline continuing after several days now, with no end in sight.

However, if we want to use technical analysis, we see the stochastic oscillators oversold but not ready to turn back yet.

Specifically, if we look at one index, the DJIA, we see that we are still in an uptrend, but with MACD turning bearish as well.

Some investors and traders like to use the 50-day Simple Moving Average, and we can see how it has been acting as a dynamic line of support here.

Let’s keep an eye on this.

So, historically, when there is a sell-off of US equities, investors stay in cash for a while, which bolsters USD.

Also, with the USD strength, Gold and Silver are pulling back a little.

That’s the first reason for the fall in price action on precious metals.

Secondly, geopolitical tensions are easing this week, which always affects the price of gold.

Thirdly, liquidity may be a bit thin with US President’s Day yesterday and Chinese New Year having many industry participants taking time off.

Fourthly, as we can see on the charts, profit-taking always takes place when prices hit record levels.

And, finally, analysts see prices breaking below $5,100 and $5,000 as psychological technical levels with various levels of support below.

For example, if we look at the gold XAUUSD 4-hour chart, we see just how important round numbers are.

$5600, $5100, $5000, $4600, $4500, $4400, and so on, where highs and lows intersected with price.

You will notice that we often use the MACD Histogram as a favourite technical indicator.

On cTrader, simply go to Indicators, Oscillators and select MACD Histogram.

Change the line thickness and colours if you wish.

Basically, any histogram showing above the zero line is considered bullish, and anything below is considered bearish.

One of the main features of MACD Histogram, though, is when the signal line crosses out of the histogram.

This often signals reversals in price action on any time frame.

And, as usual, don’t forget to backtest!

That’s all for now.

CFDs and FX are leveraged products, and your capital may be at risk.