Gold has been restored in price recently to the 3-month maximum. However, the deals to SELL still seem optimal in the short term.
Gold for the last six months has finally lost the status of a ”safe haven" for investors. With the strengthening of the dollar, investing in the yellow metal has become unprofitable. However, no one expected such a rapid decline in the value of gold. The rates fell below $1,200 and traded around this level for a long time. In addition to the strong dollar, an important factor is the trade conflict between the US and China, which has had a negative impact on the consumption of gold in the long term perspective in China.
Starting from October, the situation began to change. A positive impact was the increase in 51% of the volume of gold imports to India in September, compared to the same period last year. Nevertheless, overall, the demand for the yellow metal is lower by 8% for the last 9 months. The US dollar remains strong based on strong macroeconomic statistics, but last week retreated from highs amid a falling on the stock markets due to rising yields on US government bonds and investors' fears about the further development of the trade conflict. Furthermore, the value of the dollar fell due to Donald Trump's criticism of the Federal Reserve's aggressive monetary policy. As a result, Gold managed to recover in value to the maximum level in the last three months.
Further forecasts about the price of gold are multidirectional: some analysts see the latest recovery as a sign of the beginning of a new uptrend, indicating the achievement of a price low of 1,169 dollars, after which the rates consolidated and then moved to recovery. Other analysts suppose that the recent recovery is no more than just a price correction, after which the rates will begin decreasing again, taking into account the potential of the dollar to strengthen and the ongoing aggressive monetary policy, which no one plans to change. The Stochastic oscillator indicates the quotes are in the overbought zone. We suppose that in the current situation in the short-term perspective the most optimal seem to be the deals on the trend. However, in the long-term perspective it's also possible to open deals to Buy, although the best time for this was in early October.
