Investors are investing less in Gold, preferring other safe assets, such as the strong yen. But despite this, Gold continues to rise in price, with perspectives for further growth because the demand for safe assets is growing amid an unstable economic and political situation in the United States. At the same time, it should be noted that Gold traditionally increases in price at this time of the year, but the incentives for growth are different.
Factors that restrain the growth of the Gold are positive economic statistics for the dollar. In particular, the latest reports showed an increase in inflation. In addition, the unemployment data matches with expectations on the market. Taking this into account, investors see an increased probability for the FED rate hikes this year, specifically that there might be more than three hikes during 2018. At the same time, investors fear a new drop on the stock market, which may well be triggered by a further increase of the US bond yields. In addition, a negative impact on the dollar's growth comes from US government debt and the unpredictable politics of Donald Trump in general. Therefore, the value of Gold remains at a high level, and for the last week rose in price by almost 3% reaching the level of July 2016. At the same time, Gold is close to achieving a price maximum for the last five years.
On the chart we can see an uptrend, which is also characterized by high volatility. The MACD and Stochastic oscillators signal the overbought area and the probability of a price correction in the near future. In the medium term the most optimal action would be the deals on the trend, given the lack of essential prerequisites for the further strengthening of the USD.
