As US-China trade tensions calmed down after the successful negotiations, it supported the US Dollar and decreased the demand for gold on financial markets. Analysts are noting that this was the worst week for the price of gold since November last year. Certainly, it should be taken into account that the price of gold significantly gained from the start of this year, of around 30%, in which sense, a short term reversal could be expected at some point.
The price of gold had a significant drop at Monday's trading session, right after the US-China tariffs negotiations were settled. The gold dropped from the level of $3.323 down to $3.205. The rest of the week it was also traded with a negative trend, ending the week at the level of $3.202. Charts are showing that the price shortly reached the MA50 line at Friday's trading session. The RSI is moving around the level of 50, ending the week at the level of 46, indicating that investors are modestly eyeing the oversold market side. Despite the recent drop in the price, the MA50 is still diverging from MA200, without an indication that the potential cross and trend change is in store for gold in the coming period.
Short term reversal was expected, at least based on charts. The strong demand for gold, started due to uncertainty over the geopolitical and tariffs risks, was pushing the price of gold to ATHs. The settlement of these issues indicated that there might come to some relaxation in the price of gold, which occurred, during the last two weeks. Current charts are showing that there is a space for further relaxation in the coming period, only in case that there are no surprising fundamentals which might increase fear among investors. At this moment, the level of $3.150 might easily be the next target of gold. This would be the second testing of this level for the last two weeks. There is also some probability for the move toward the upside, but charts are not indicating a move higher from $3.300 level.
The price of gold had a significant drop at Monday's trading session, right after the US-China tariffs negotiations were settled. The gold dropped from the level of $3.323 down to $3.205. The rest of the week it was also traded with a negative trend, ending the week at the level of $3.202. Charts are showing that the price shortly reached the MA50 line at Friday's trading session. The RSI is moving around the level of 50, ending the week at the level of 46, indicating that investors are modestly eyeing the oversold market side. Despite the recent drop in the price, the MA50 is still diverging from MA200, without an indication that the potential cross and trend change is in store for gold in the coming period.
Short term reversal was expected, at least based on charts. The strong demand for gold, started due to uncertainty over the geopolitical and tariffs risks, was pushing the price of gold to ATHs. The settlement of these issues indicated that there might come to some relaxation in the price of gold, which occurred, during the last two weeks. Current charts are showing that there is a space for further relaxation in the coming period, only in case that there are no surprising fundamentals which might increase fear among investors. At this moment, the level of $3.150 might easily be the next target of gold. This would be the second testing of this level for the last two weeks. There is also some probability for the move toward the upside, but charts are not indicating a move higher from $3.300 level.
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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.