Gold price fell 1.2% after five days of gains yesterday

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After the most powerful in more than a year of weekly growth for the last five days, gold prices retreated for the fourth day in a row. And on Tuesday, the metal fell the most since July of last year, down 1.2%. Today, intra-day quotations decrease by 0.2% and the risk to continue the bearish move in the short term.
The yellow metal now weighs three factors. This recovery of the dollar, which demonstrates a technical correction after the aggressive collapse last week. Is the stabilization in global financial markets, which continue to rebound after the sell-off in early February. This low activity on the market of precious metals, due to the fact that many Asian buyers continue to celebrate the New year according to the lunar calendar.
If to estimate prospects of gold through the prism of the “dollar factor” that is nearest and an important risk factor for metal – publication of the minutes of the meeting of the fed tonight. Partly the current revival of demand for the American currency due to expectations of tightening rhetoric of the regulator in the future pace of rate increases. If we do hear of such hints, the dollar will receive additional impetus for growth that will increase pressure on gold.
As for the longer-term picture, given the lack of preconditions for a reversal of the downtrend in the dollar, the metal can rise to new heights on new attacks sales USD, which remains influenced by concerns about the twin deficits, trade wars, and amid the prospects of a collapse of incentives in other countries.
Sergey Kostenko,
Investment analyst