Gold Approaching Compelling Buying Indication Amid Weakening US Dollar

Welcome to Jaggards Friday Market Insight

24 Feb, 2023
As at 10am, AEST.

Gold Spot Price $AU2,675.83

Silver Spot Price $AU31.29

Platinum Spot Price $AU1,394.95

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Market News Highlights

Gold is approaching its most compelling purchase indication in four months due to the decline in the U.S. dollar. As per the 14-day Relative Strength Index (RSI), gold was at its most excessively oversold level since October 2022 by the conclusion of last week.

In the last few day’s we have seen a slight swap in currency strength, noting the USD/AUD touched 71.4c then dropped to 68.1c (current). This reversal has softened the downward pressure both Gold and Silver have felt here in Australia over the last week.

Retrospectively;

In 2011, the Australian dollar met and exceeded parity with the USD Dollar, during an economic period of great uncertainty, also referred to as the Great Recession (following the Financial Crisis). It was during this year, Gold also hit $US2410.

Today we’ve included some charts that show the similarity between then, and now.

As always, predicting the future is extremely difficult - however, patterns can be cyclical. Perhaps we’re on a similar trajectory today, as we were back then.

USD/AUD

With a focus on the Global Financial Crisis, followed by the weakening of the USD (Strong AUD).

We’ve just seen a period of weak AUD since 2019.

USD/GOLD

With a focus on the same periods (Global Financial Crisis and Post Covid-19)

*Not financial advice, please do your own research prior to any investment decisions you make.