The price of the yellow metal had the worst performance in a year, as the price fell to the level of support at $1382 per ounce from the resistance level of $1424 and stabled around 1392 at the time of writing. This was amid optimism among financial markets and investors after the summit of Trump / Xi and agreeing on the return to the negotiating table. Therefore, investors have abandoned the safe haven assets led by gold. The price of an ounce of gold still has a strong chance to confirm the bullish trend with a move toward the higher psychological resistance at $1400 again.
Recent gold price gains reached the resistance level of $1439 / troy ounce, the highest level in six years, as we had previously predicted and confirm now that the stability around the top of the psychological peak of $1400 would consolidate the strength of the bullish trend of gold price, which still exists. Gold is in a five-week bullish streak.
The last correction is very natural and we pointed out that gold has reached strong overbought areas and can be corrected at any time. At the same time, we still prefer to buy gold from a bearish level. Continuing global trade and political tensions, along with the falling US dollar means further gains for gold prices. World trade war has clearly contributed to slowing world economic growth and has helped pressure central banks to ease monetary policy. The agreement between the two parties means more risk appetite and therefore gold abandoned its recent gains
We have confirmed in recent technical analysis that US interest rate cut signals will support the decline of the US dollar and further gold gains, which actually happened after the Federal Reserve announced its monetary policy. The bank stressed the possibility of a US interest rate cut, did not set a date for that and left it linked to economic developments. The recent performance of the gold price confirms our expectations that buying from each bearish level will be the best strategy for dealing with the yellow metal.
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Technically: Gold prices today confirm the strength of the bullish move around and above the psychological peak at $1400, and therefore the nearest levels of resistance might be 1415, 1425 and 1433 respectively, which were already reached and holding to it with the recent correction with profit taking through sales. On the downside, the nearest support levels for gold today are 1380, 1370 and 1355, respectively. We still prefer to buy gold from every bearish bounce.
In terms of economic data: the yellow metal will have all its focus on the US dollar level. Gold will also be affected by investors’ risk appetite, as gold is one of the most important safe havens.
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