The short-term outlook for gold appears mixed, with prices suffering from the risk-on mood now prevailing in financial markets, which pushed investors to bet on riskier asset. Traders are now waiting for Mario Draghi’s speech, to understand if he will be able to fulfil the expectations that he raised of even lower interest rates and more economic stimulus, which could be in the form of assets purchase. Since expectations for the meeting of tomorrow are quite high, the risk of a disappointment is high too, if Draghi does not manage to get approval from his team to go ahead with this measure in his final ECB meeting.
The decline of gold seen in the last few days is also reflecting these expectations. In any case, the correction remains moderate, even if prices reached a new 1-month low. Gold is still within the values hit on August 13 (low 1,477, high 1,533). A break, up or down of these levels could offer a new directional impulse, even if the main trend still appears positive.
