The price of gold remains near yearly lows

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Gold prices continue to trade near 1-year lows in the face of local resistance near 1245. Despite the attempts of growth, the potential recovery of the yellow metal looks limited and correction is weak. The asset is still subject to downside risks in line with a deep bearish trend.
While the longer-term prospects of precious metals can improve. The fact that trade war not only contribute to the acceleration of inflation due to management duties, but also undermine economic growth. This threat to global trade and Economics, and US GDP. In this case, the fed will not be able to afford a tightening policy to a more aggressive pace. Moreover, at a certain stage, may be forced to take a break – depending on the future scale of trade conflicts.
In this case, the attractiveness of the dollar falls, because in many ways the rise since mid-April due to the rigid policy of the fed. Thus, in such a scenario, gold has a chance to return to growth after a massive sell-off in the first half of 2018.
So, if the short-term Outlook of the yellow metal remains negative, the longer-term picture indicates the risks for the dollar and, consequently, the possible prerequisites for the restoration of the lost positions of the metal.
Michael Mashchenko,
Analyst social network for investors
eToro in Russia and the CIS