Gold: covering market lossesFriday's trading session was one of the most painful ones in the recent history of financial markets, surpassing the depression after pandemic lockdown in 2020. The price of gold also pulled back on Friday, around 3%, ending the week at the level of $3.037. Analysts are noting that the sell-off of gold was triggered by investors who were selling this asset in order to cover margin calls from other markets. In addition, there are also fears of trade wars, which started after China imposed a 34% tariffs on all US goods, as a response to US tariffs. Regardless of this short retreat, gold continues to be perceived as a safe-haven asset for investors.
At the start of the week, the price of gold reached a fresh, new all time highest level at $3.160. However, news regarding tariff-war triggered the main sell off on Thursday and Friday, and the price of gold ended the week at $3.037. The RSI reached the clear overbought market side, but ended the week at the level of 54. It still has not entered into the road toward the oversold market side, but there is some probability for this move in the coming period. There has not been much change when MA 50 and MA200 are in question. These lines continue to move as two parallel lines with an uptrend, without any kind of indication over a potential cross.
At this moment, market uncertainty is at its highest level. During the week ahead, any new news regarding tariffs or countermeasures from other countries, will trigger market reaction. Volatility will continue to be high. In case that more investors sell gold in order to respond to margin calls, the price of gold would continue to drop further. However, if markets calm down, there is potential for a modest upside, probably until the level of $3,1K, but this should be taken with a reservation. Market optimism is at its lowest level now, so some significant moves toward the upside should not be expected. At this moment, the price of gold has equal chances for a move toward the up and down side during the week ahead.