Gold Price Rebounds 2.5% but 'Dead Cross' Pours Cold Water on Relief Rally

▲ Gold, Bear Market/AI Generated Image

Gold rebounded 2.5% in 48 hours, but a stronger bearish warning emerged on the chart. A dead cross, where the 50-day moving average fell below the 200-day moving average, was confirmed, pouring cold water on the relief rally.

According to financial media FXLeaders on July 5 (local time), gold rose to $4,171.15 per troy ounce. However, it fell approximately 14% in the second quarter, marking its worst quarterly performance since 2013. Despite a rebound of about 2.5% in the last 48 hours, technical bearish signals have not disappeared.

The dead cross was confirmed on June 29, with the 50-day simple moving average clearly falling below the 200-day simple moving average. The media analyzed that although gold prices rebounded to around $4,170 after the release of employment figures, algorithm and chart-based momentum still leaned heavily towards a decline.

The spark for the rebound was the US June non-farm payrolls report. New employment totaled 57,000, significantly below market expectations of 114,000. Concerns about aggressive interest rate hikes weakened, providing a breather for non-interest-bearing gold, which surged 2.5% in 48 hours.

Gold plummeted 28% from its January high of $5,589. Rallies in tech and AI stocks absorbed liquidity from defensive assets, while a strong dollar and hawkish remarks from the US Federal Reserve also increased downward pressure. As it dipped below $4,000 at the end of June, physical buying flowed in from major retail markets, including India, forming a short-term price floor.

FXLeaders pointed out that in strong downtrends, like in July 2013 and 2022, a dead cross occurring has been followed by faster and deeper declines rather than forming a bottom. Despite gold's 2.5% rebound, the dead cross confirmed on June 29 was presented as a technical signal that short-term bearish momentum continues.

[Article Key Summary]

-Gold fell approximately 14% in the second quarter, marking its worst quarterly performance since 2013.

-On June 29, a dead cross was confirmed as the 50-day moving average fell below the 200-day moving average.

-Despite gold rebounding 2.5% in 48 hours after US June new employment reached only 57,000, technical bearish signals persisted.

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