At the moment the US dollar is stable, which is reflected on the value of Gold. The rates consolidated within the flat trend starting from January. At the same time, there are signs of movement of the rates down to the support line, as the demand for safe assets decreased this month. If investors want to invest in the “safe assets”, they prefer a strong Japanese yen, as the most promising and stable currency to date.
Today the market is waiting for the FED decision on the interest rate and information about their plans for monetary policy in the near future. Investors expect an increase in the interest rate by 25 points, which will have a positive impact on the value of the dollar, and of course, a negative impact on the value of Gold. Therefore, the probability of decreases in the value of Gold is very high. The rates can come close to the support line at the level of 1310-1306 dollars. At the same time, analysts suppose that the rates will continue within the established range of 1306-1339 dollars for a long time. After another decline, Gold could recover in price due to fears of a global trade war, if Donald Trump realizes his promises to impose trade duties on imports. Therefore, the deals to BUY can be effective in the long term. If this does not happen, we can expect a gradual decrease in the value of Gold and the formation of a weak downward trend.
However, at the moment, in short-term trading, the most effective will be the short deals; this is also confirmed by the Stochastic oscillator signaling the rates in the overbought area. The entry point can be specified also at the level of $1,306, the breakout of which will signal the shift of the support line and the formation of a downtrend. The breakout of the $1,339 level is unlikely to happen in the near future.
