Gold prices soared to 2-week highs

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The day before gold prices soared to 2-week highs around 1 336.50. The path opened up dynamics of the dollar, which was down pending the outcome of the meeting of the RFU and accelerate the path to the South after the “pigeon raising” rates. At least, dubbed so by a verdict of the Central Bank to market participants.
Aggressive sales of the American currency was triggered mostly by the fact that traders were determined to improve the Outlook for rates up to fourfold increase in the cost of lending this year. But instead, the regulator indicated the possibility of three (instead of two) increases in 2019. Not trusting the long-term forecasts, the implementation of which will depend on many factors and is not guaranteed, the markets focused on the lack of enthusiasm in the matter of the pace of tightening in the coming months. This played against the dollar, strengthening the position of the yellow metal.
However, the prospects of further rise in price of gold remain vague, despite the disappointment of “American”. Recently, the precious metal does not enjoy the once active demand from investors during periods of flight from risks, and dynamics of quotations dictates mainly the dollar. The U.S. currency, although it remains weak but has recently been demonstrating some signs of improvement in mood, trying to resist the attacks from the protectionist position of trump.
Against this background, we continue to believe that gold will continue to move in line with the bearish move with a target at around 1 200, and the growth attempts will be regarded as an opportunity for sales, provided the dollar doesn’t get a new major shocks in the medium term.
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Sergey Kostenko,
Investment analyst
GLOBAL FX