The rates continue within the downward trend. Recently gold has been influenced by many negative factors: a trade war, a strong dollar, and even a crisis with the Turkish lira, which has motivated investors to invest in a strong dollar and the Japanese yen. These two currencies are considered by investors as a “safe haven” at the moment. Nevertheless, the fall in the value of Gold was more rapid than expected on the market. The price of the yellow metal easily overcame the psychological level of $1,200 and fell to $1,170. Gold was cheaper only in 2015-16 and earlier.
This week the probability of a trade war between the United States and China had a negative impact on the value of Gold. Donald Trump is considering the introduction of new duties on Chinese goods worth $200 billion. At the same time, the signing of a trade agreement between the United States and Mexico also affected gold negatively. We can assume that the announced conclusion of a similar agreement between the US and Canada will also push gold to a decline. Disappointing perspectives for the value of gold were also declared by the Fed Chairman Jerome Powell, who announced a further increase of the FED rate, given the strong US economy.
As for the short-term perspectives for gold prices, you can find conflicting opinions. Some analysts suppose that the local minimum has already been reached, so the rates will continue to recover. Others believe that given the many negative factors and risks for the world economy, gold will continue to be in the range of 1,210-1,160 dollars, and the latest price recovery to 1,206 dollars can be considered as a regular price correction. In this situation, the most optimal would be the short deals on the trend, given the high probability of turning to the psychological level of $1,200 and below. The Stochastic oscillator also indicates the efficiency of the deals to sell.
