The price of an ounce of gold succeeded in compensating a large part of its losses during yesterday's trading session, as it rose by 35 dollars, and reached to the $1428 level an ounce at the time of writing. The recent downward correction move pushed the price towards the support at $1383, after optimism of renewed negotiations between the United States and China to end the biggest global trade dispute that threatens global economic growth.
Gold's strong gains are due to the loss of confidence investors have towards Trump, as he often negotiate and agree and eventually impose more tariffs. This time the situation will be dire for the global economy, and thus, investors hedge with safe haven assets, most notably gold. The price of the yellow metal saw the worst performance in a year, as the price fell at the beginning of this week to the support level of $ 1382 an ounce. After gains to the resistance level of $1439 an ounce, the highest in six years. As we have predicted before, and now confirm, the stability around the psychological summit of 1400 consolidate of the strength of the price upward trend, which still exists. Gold is in a five-week bullish streak.
The last correction is very natural and we pointed out that gold has reached strong overbought areas and can be corrected at any time. At the same time, we still prefer to buy gold from a bearish level. Continuing global trade and political tensions, along with the falling US dollar means further gains for gold prices. World trade war has clearly contributed to slowing world economic growth and has helped pressure central banks to ease monetary policy. The agreement between the two parties means more risk appetite and therefore gold abandoned its recent gains
We have confirmed in recent technical analysis that US interest rate cut signals will support the decline of the US dollar and further gold gains, which actually happened after the Federal Reserve announced its monetary policy. The bank stressed the possibility of a US interest rate cut, did not set a date for that and left it linked to economic developments. The recent performance of the gold price confirms our expectations that buying from each bearish level will be the best strategy for dealing with the yellow metal.
Technically: Gold prices today confirm the strength of the bullish move around and above the psychological peak at $1400, and therefore the nearest levels of resistance might be 1415, 1428 and 1440 respectively, which were already reached and holding to it with the recent correction with profit taking through sales. On the downside, the nearest support levels for gold today are 1410, 1395 and 1375, respectively. We still prefer to buy gold from every bearish bounce.
In terms of economic data: the yellow metal will have all its focus on the US dollar level. Gold will also be affected by investors' risk appetite, as gold is one of the most important safe havens.