Gold rate: Recovery does not inspire confidence among investors
On Wednesday, gold prices have undergone a new wave of sales, which was triggered by a widespread strengthening of the dollar. The precious metal was forced to return under the 1250 mark, but managed to defend support around 1240 and stayed above the recent lows.
Dollar demand in the face of escalating trade conflict between the US and China. Players appreciate the position of the American currency as more stable in case of further incite trade wars and, as a consequence, the global economic slowdown. Against this background, the gold fades, despite its status of a protective asset.
Moreover, referring to the potential acceleration of inflation due to exchange import duties, market participants lay in the price the prospect of more aggressive fed tightening to fight rising consumer prices. This is an additional factor that increases the attractiveness of the dollar, which still benefits from trade protectionism trump.
On Thursday, the yellow metal is trying to recover, taking advantage of the stabilization of the dollar at current levels. However, while the technical picture suggests that the metal remains vulnerable and is ready to resume movement in the South with the new surge in purchases of U.S. currency. The nearest resistance is in area 1245 and support at 1240. Her loss will return the metal to the lows reached on July 3.
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