Too Much Pressure :: InvestMacro

by RoboForex Analysis section

Gold prices reached stability on Monday not far from $1,812 an ounce. The strong US currency is still putting a lot of pressure on the precious metal.

Despite the significant market turmoil, the demand for gold as a “safe haven” asset is close to zero as US bonds are rising and attracting more interest. Unlike bonds, gold does not generate its own profitability.

Another factor makes gold less attractive to investors in anticipation of another rate hike by the US Federal Reserve system.

Also, the price of gold is under pressure from news from India, which raised import duties for the precious metal from 7.5% to 12.5% ​​to reduce the foreign trade deficit. This move will reduce the demand for gold in the country – the news is very important for market players because India is the second largest consumer of gold on the planet.

As we can see on the four-hour chart, after completing the first descending structure at 1805.05, together with the correction upwards to 1857.10, the XAU/USD pair rebounded from the last level; At the moment, it is declining again with the short-term target at 1764.00. Later, the market may start a new correction to test 1811.77 from below and then resume trading downwards towards 1704.88. From a technical point of view, this scenario is confirmed by the MACD Oscillator: its signal line is moving below 0 and may update its bottoms soon.

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On the H1 chart, gold finished the descending wave at 1784.22, together with the correction to test 1812.40 from below; At the moment, it is consolidated below the last level. The metal is likely to break this range lower and resume the decline with the short-term target at 1764.00. From a technical point of view, this scenario is confirmed by the Stochastic Oscillator: after breaking the lower level of 50, its signal is expected to continue falling and reach the level of 20.


Any expectations herein are based on the author’s own opinion. This analysis may not be treated as trading advice. RoboForex assumes no responsibility for trading results based on Trading recommendations and reviews contained here.

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