The rates continue within the upward trend. It is believed that gold has been actively recovering in price for 4 months, given the slowdown in the global economy, the weakening of the USD and the easing of the FED's monetary policy, as well as the ongoing trade conflict between the US and China. Gold has turned out to be a key safety asset for investors today due to the fact that the Japanese economy is in a stage of economic recession, and therefore investors are not ready to invest in the JPY as a safe asset.
In February Gold retreated from the price high of $1,364 reached at the end of January. After a series of political and economic problems in the US, the situation has stabilized: the shutdown is over, the stock markets have stopped falling, and the US macroeconomic reports support the dollar at the optimal level. The reports on the real estate market, the growth of the PMI index to 64.7 points, as well as GDP data show the growth of the US economy in early 2019 and strengthen the USD. In addition, the minutes of the January meeting reflected a more aggressive position to the rate than expected.
The strengthening of the dollar certainly had a negative impact on the value of Gold. Also, this week there were a number of other short-term factors, such as the escalation of the conflict between India and Pakistan. Investors fear a decline in Gold imports in India, in case the conflict continues.
The decrease in the price of Gold for the month by 4% on the chart can be regarded as a strong price correction. The rates are trying to shift the support line down. At the same time, it is too early to talk about changing the trend. Incentives to further reduce prices may not be enough, and in the medium term we can expect prices to return to the range of 1320 - 1330 dollars. The MACD and Stochastic oscillators signal that the rates are in the oversold zone and confirm the efficiency of the deals to BUY.
