Gold Prices Pull Back from a 7-year High in Asia Amid Risk Tolerance Decline

  • With the volatility of the COVID-19 spread, USD weakened last Monday, pushing the gold prices higher against prior resistance of $1,680, shifting to the low $1,700s.

    The world acting as a catalyst sustains the strength of the yellow metal while readjusting to the US dollar movements. In the US, gold on Comex settled at $1,761.40, making it the 7-year high since October 2012. This move was more in alignment with the US stock exchanges, with both S&P 500 and DJIA plummeting.

    Following gold’s jump from the 7-year high of $1,730 on Monday, a slight pullback is seen and expected to go down further to $1,703. Judging from the RSI of the hourly chart, divergence is likely to influence a bearish reversal. 

    However, this may be a temporary bull strain response. Therefore, a sustained decrease in prices may follow before a surge of above $1,730. 

    On Monday, the gold plotted a massive bullish outlook, reasserting a stronger wave from the $1,445 during March. In Asia, the USD/JPY was shifting to lows, paving the way for a bullish gold outlook. 

    According to analysts at TD Securities:

     

    “Looking forward, we continue to see a set-up for a multi-year bull market being cemented, as the market is flooded with monetary and fiscal stimulus, while Fed rates are at the zero bound, which suggests investors will continue to seek gold’s warm embrace as real global rates become entrenched in negative territory,” 

     

    This further bolsters the Gold to move in an upward direction in the long run. 

     

     

    Risk Disclaimer:
    Information on this page are solely for educational purposes only and is not in any way a recommendation to buy or sell certain assets. You should do your own thorough research before investing in any type of asset. Learn to Trade does not fully guarantee that this information is free from errors or misstatements. It also does not guarantee that the information is completely timely. Investing in the Foreign Exchange Market involves a great deal of risk which may result in the loss of  a portion or your full investment. All risks, losses and costs associated with investing, including total loss of principal and emotional distress, are your responsibility.

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