Gold Prices and Why There’s Nobody Buying
At the back end of last week Gold prices slid to levels not seen since mid March, all-in-all it was Gold’s worst performing week of 2017 so far. The recent strength of the US Dollar put pressure on Gold as expectations of a rate rise grow.
The US Fed gave indication that planned rate rises this year were still on track, with many commentators looking to June as the likely month they will increase. The strong non-farm payroll data on Friday reinforced this thinking.
Gold can suffer while the Dollar strengthens because commodities priced in US Dollars become more expensive, and demand from those trading in other currencies often falls.
Goldman Sachs remain cautious on Gold prices in the near term, stating: “In the very near term we continue to expect that gold will trade moderately lower – our three-month target is $1,200/oz, as a number of bearish catalysts have yet to fully play out,”.
With stocks still rising and consolidating near all-time highs, there seems to be no rush to Gold either from worried investors. However, it would be worth keeping an eye on Gold, for any sudden movements from a support level, as stocks may pull back slightly as the summer months commence.
What is worth noting is that Gold currently trades above a reasonably strong level of support around $1200. On the chart below you can see the touches of lows and attraction to that price level.
This really should be the line in the sand that investors will be watching. A hold above could see the next move in Gold head higher, consequently a clean break of this level (maybe on a rate rise) could signal further weakness and tests of levels from late 2016.
Either way there is something brewing. A critical time for Gold approaches.
About Pete Southern
Pete Southern is an active trader, chartist and writer for market blogs. He is currently technical analysis contributor and admin at this here blog.
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Currency Articles - May 22, 2019 15:21 - 0 Comments
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