Gold drops sharply as investors mull over the prospect of an economic slowdown
Gold’s difficulty with ‘big numbers’

(USAGOLD – 3/27/2022) – Gold dropped sharply in overseas trading as investors weighed the inverting yield curve, Shanghai went into an Omicron-driven shutdown, and investors mulled over the prospect of a general economic slowdown. It is down $22 at $1939. Silver is down 45¢ at $25.18. A stronger dollar this morning is also weighing on gold market sentiment. Gold Newsletter’s Brien Lundin believes that there will be setbacks ahead for precious metals, even though they now have the wind at their back.

“Important to remember,” he writes in a recent advisory, “that these ‘big numbers’ usually take at least a few tries (and often many tries) to get through, as you can see in the chart below. Note how many attempts it took gold to clear the $1,700, $1,800, $1,900 and, yes, $2,000 levels. So clearly the next hurdle likely won’t be the last time gold bounces around $2,000. But the difference now is that not only has the technical picture cleaned up considerably, we also have the powerful fundamentals of inflation and the Fed’s doomed battle against it to support the gold uptrend.”

Gold price
Line chart showing big number resistance gold price
Chart courtesy of per Brien Lundin-Gold Newsletter

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