The turmoil on stocks seen earlier this week and particularly the greenback’s recovery are hitting gold. The Dollar Index gained by 1.5% to 94.2, which was enough to generate a sharp fall for the yellow metal. The sharp decline below $1,920 demonstrated a weakness for bullion, something not seen for quite a few weeks, with the price then plummeting too easily to $1,880 with increasing volatility.
Technically, we are now approaching the support zone at $1,860, which generated a strong rebound earlier in August. This is an important area to monitor, in order to understand if bullion can remain in the trading range of $1,860-$2,070 of the last few weeks. We should anyway remember that central banks’ policies are not yet changing, and ultra-low rates will last for a long time. In other words, we should probably be cautious before calling the end of the golden age for gold.
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.