Gold has been quite corrective and volatile, having reached $1,440 with a daily close recently. Such a price move indicates further downward pressure. Now gold is making a correctional decline before the price resumes the bullish trend and heads towards $1,500.
Gold prices were trading almost flat as traders remained cautious ahead of a congressional testimony by Federal Reserve Chairman Jerome Powell later this week. Investors cheered stronger-than-expected employment in the US public and private sectors. On the flip side, a separate report revealed persistent moderate wage gains and mounting evidence the economy was losing momentum. Such arguments could still encourage the Federal Reserve to cut interest rates this month. On the whole, the US nonfarm payrolls reduced market expectations that the US Fed will venture into a series of rate cuts. Better-than-expected employment data boosted the US dollar to the highest level in two weeks, putting pressure on gold prices that ended the week down 1% and snapped two weeks of gains.
Currently, the market is anticipating the testimony of Fed Chairman Powell. His speech is expected to clear up the trajectory of Gold prices. Additionally, most of the world’s central banks are enlarging their holdings of the precious metal in 2019 amid a slowdown in the global economic growth as well as growing trade and geopolitical tensions. Thus, some monetary authorities seek to diversify their reserves away from the US dollar which has lost a status of the safest and high-yielding investment.
Meanwhile, Gold is currently trading at the level slightly below $1,440 with certain corrections and indecisive waves. The price is also being held by level of 20 EMA as resistance indicating further bearish momentum. The price has already rejected off $1,440 more than once and the rejection was quite impulsive with a counter move. As the price remains below $1,440 with a daily close, Gold is expected to trade lower towards $1,350 in the coming days before any strong bullish trend evidence is detected.
SUPPORT: 1,300, 1,350
RESISTANCE: 1,400, 1,440-50
The material has been provided by InstaForex Company – www.instaforex.com