Gold: uncertainty holds
The price of gold continued to move within a positive correlation with the US Dollar for the last two weeks. Regardless of US Dollar further gains during the previous week, the price of gold also took the path toward the higher grounds. The resistance line at $2,7K has been tested, while the price of gold is ending the week at the level of $2.702. The geopolitical issues are now modestly calming down, however, the forthcoming inauguration of the new US Administration on Monday, January 20th, still represents some uncertainty for global investors. The moves that the new Administration might impose, especially related to trade tariffs with China, is still perceived among investors with a dose of scepticism.
The highest weekly level of gold was reached on Thursday at the level of $2.721. From this level the price was “rejected” on Friday, where the gold was traded lower, but still above the $2,7K level. The RSI is clearly heading toward the overbought market side, but is still moving around the level of 60, which leaves some space for a further increase in the price, before the actual overbought market side is reached. The moving average of 50 days continues to modestly converge toward the MA200, however, there is still a distance between two lines, as well as potential cross.
Current charts are showing the potential for the price of gold to shortly revert back toward the $2.650 level. However, this does not imply that such a move would occur in the week ahead. Since November last year the level of $2,7K has been tested on three occasions, where in two cases the price of gold was not able to cross this level. Whether the same situation will also occur this time is hard to note with a higher level of certainty. Certainly, market sentiment shaped on Monday, after the inauguration will set the stage for the future course of gold. If uncertainty continues, there is a higher probability that the price of gold will move toward the higher grounds. In the opposite case, the price of gold will start its reversal toward the marked level of $2.650.
The highest weekly level of gold was reached on Thursday at the level of $2.721. From this level the price was “rejected” on Friday, where the gold was traded lower, but still above the $2,7K level. The RSI is clearly heading toward the overbought market side, but is still moving around the level of 60, which leaves some space for a further increase in the price, before the actual overbought market side is reached. The moving average of 50 days continues to modestly converge toward the MA200, however, there is still a distance between two lines, as well as potential cross.
Current charts are showing the potential for the price of gold to shortly revert back toward the $2.650 level. However, this does not imply that such a move would occur in the week ahead. Since November last year the level of $2,7K has been tested on three occasions, where in two cases the price of gold was not able to cross this level. Whether the same situation will also occur this time is hard to note with a higher level of certainty. Certainly, market sentiment shaped on Monday, after the inauguration will set the stage for the future course of gold. If uncertainty continues, there is a higher probability that the price of gold will move toward the higher grounds. In the opposite case, the price of gold will start its reversal toward the marked level of $2.650.
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.