Double Bottom Pattern in Gold

Gold has formed a double bottom reversal pattern on the daily chart. Price has risen from the lows of $1,676 and is nearing the neckline at $1,755. A breakout with good volume above this level would be conidered bullish from a technical perspective.

Gold prices were lifted this week by a weaker US dollar and lower US Treasury yields. When the dollar falls, it makes gold cheaper for buyers in other currencies. Lower interest rates from US Treasuries make non-yielding assets like gold more appealing.

However, risk appetite remains intact, which could keep a lid on gold prices. Strong economic data has lifted the Dow and S&P 500 to record closes this week, dampening demand for safe-haven assets such as gold.

Elsewhere, Bitcoin, sometimes dubbed as the ‘digital gold’, continues to hover near its record high of $61,818. Soaring Bitcoin and cryptocurrency prices have now lifted the value of the entire cryptocurrency market to over $2 trillion for the first time.

Investors look to the FOMC Meeting Minutes, scheduled for release later today. The minutes will clarify members’ thinking from the March meeting, which saw the central bank’s forecast for economic growth upwardly revised.

On Monday, Cleveland Federal Reserve Bank President Loretta Mester said that the US economic outlook is brightening but that the Fed should stick to its loose monetary policy in order to support growth. Speaking on CNBC she stated: “I’m thinking that we’ll see a very strong second half of the year, but we are still far from our policy goals.”