Gold futures futures declined sharply Tuesday and Wednesday, as the Dollar Index ($DXY) is firming and interest rates are rising.

Gold has fallen below $1300 and is currently trading around $1290 per ounce.

The Dollar is rising along with interest rates – The yield on the 10-year note has surged past 3 percent.

The rise in interest rates comes after the release of the latest retail sales data, which came in at 0.3% month over month growth for April, below analyst estimates of 0.4%, but still considered strong. Retail sales for March were revised to 0.8% from 0.6%.

Looking at the chart below, we can see gold falling as the declining phase of its current market cycle comes to a close.

The cycles are represented by semicircles in the chart below and are grouped into a large “harmonic family,” or group of cycles.

Gold Futures (GC) Chart with Daily Bars

gold futures price analysis research outlook forecast_16 may 2018

Our analysis indicates that this is a capitulation stage, meaning that as the cycle “nest” together, risk increases to the downside, with investors sell emotionally and weak holders get washed out. Our support level was $1302 and the next level is $1288. We believe an important low is pending.

Check out the latest episode of FutureSpeak below, in which we analyze the cycles for gold and 22 other futures contracts.

FutureSpeak – askSlim Special Presentation 05/13/18

 

Twitter:  @askslim

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

 

Not Investment Advice – Please read investment disclaimer.