Investors are seeing relatively less risk from the US–Iran situation, at least for now. This had a strong impact on gold, which collapsed to $1,550. Indeed, this sharp decline reflects a reconsideration of the risk coming from the geopolitical situation. It is not unusual that after an initial impulsive rally, the price slows down when investors are able to better weigh the real risk.
From a technical point of view, the bullion price is now challenging the key support level of $1,550, continuing the decline started yesterday. It will be a positive signal if prices can halt their fall on this level, otherwise – at least in the short term – gold could lose momentum, despite the main trend (long term) remaining strongly bullish.
Chief analyst at ActivTrades and technical analyst for Italian newspaper 'La Stampa'. Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a weekly commentator for CNBC Italy and a columnist for La Stampa. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a 250-pages book on gold and the gold market, followed in 2018 by a new updated edition.
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© 2019 High Leverage FX - All Rights Reserved.