Gold price shows custom dynamics
Important for traders events are happening before our very eyes in the gold market. Yesterday the price broke first the local support at $1213 per ounce (which corresponds to at least July 31 of the current year), then a bit more important support at $1211 (minimum of July 19). On Friday, the decline continued, and the price came close to key support level of $1204, which corresponds to the lows for July 10, 2017.
A break of this level would mean a return of prices to values of the beginning of March last year. Further targets for reduction can be $1194, and then strategically may reduce to $1046 – November 2015.
According to “Alpari gold”, the behavior of gold since mid-April (when the price reached $1365) demonstrates a serious change of attitude in the investment world this precious metal. More recently (in historical terms) was dominated by the belief that gold is the eternal value, and increases if not always, in a situation of global crises certainly. Later, from the end of 2011, when gold reached $1920, turned down, thoughtful investors, it became clear that gold is growing in all crises, but only with the threat of high inflation and deflationary crises, by contrast, do not add to his attractiveness. But what happens to gold recent months, generally can not be explained from the point of view of the lovers of precious metals.
What is the overall situation in the world? Broke out trade war between the US and virtually the rest of the world. This, according to the predictions of almost all international financial institutions, will lead to slower economic growth in the world. In developed economies (US, EU, UK, etc.) rising inflation (up to target levels of regulators, but nevertheless). Growing geopolitical tensions, here lately for the role it hearth pretend Iran (threat of us sanctions and a retaliatory threat to close the Strait of Hormuz to oil supplies from the Persian Gulf). The set of such factors has always and inevitably led to the fact that investors sought refuge from the threats of gold.
But not so this time. The gold on this background information not only increases, but even decreases, approaching an important long-term levels. This suggests that ceasing to be the money a few decades ago, gold literally before our eyes loses its appeal as the standard protective asset.
Recommend to open short positions on gold at a penetration level of $1204.