The rates continue within a downward trend. Gold traditionally retreats due to the strengthening of the dollar and the increase in the FED rate. At the same time, the US trade war with other countries, especially with China, did not lead to an increase in gold prices as a protective asset: investors prefer other safe assets, such as the Japanese yen or US government bonds. In many ways, this can be explained by the fact that the demand for gold as a raw material may decrease with a trade war. US President Donald Trump continues with his protectionist policies that led to the trade conflict with the EU and China. If nothing changes, gold can still be supported in the future based on developments in geopolitical tensions. At the moment investors are afraid of the new law on limiting investments from a number of countries, including China.
A number of analysts suppose that gold will be able to get support in the medium and long term, and the dollar will lose the incentive to growth, thanks to which it has been strengthening recently. Investors have already taken into account the expected rise of the FED rate in the value of the dollar; the dollar also increased in price, considering the statements of the Federal Reserve's head about the necessity for further increasing of the rate to achieve a balance in terms of inflation and employment.
The long-term forecasts of analysts also indicate a resumption of growth in the value of gold. In particular, analysts of Commerzbank expect gold prices to rise to $1,500 per ounce in 2019, but by the end of 2018 the cost of the yellow metal should be able, in their opinion, to reach $1,350.
The oscillators (RSI, MACD, Stochastic) unanimously point to the rates in the oversold zone. Therefore, in the near future we can expect at least a price correction. However, given the situation on the chart, we can assume that gold may still fall in the near future to the level of 1,251 dollars, and then move onto growth, given also that the USD can get support tomorrow with the release of new data on US GDP. So, in the medium and long term, the most optimal can be considered the deals to BUY, while in the short term the deals on the trend can still be profitable.
