During the previous week Gold has clearly shown that this is a safe-haven asset during times of high geopolitical and economic uncertainties. The price of Gold reached $2K during the previous week, due to high geopolitical risks, which might indirectly impact world most developed economies through increased prices of real assets, most of all, oil prices. For the second week in a row, since the start of the Middle East confrontation, the demand for Gold was significantly increased, moving its price to the higher grounds. Still, gold is finishing the week at level of $1.980.
With the latest strong push in price, RSI reached a clear overbought side, by reaching the level of 70. Moving average of 50 days started its convergence toward MA200. With still significant distance between two lines, it is early to speak about potential cross.
Can the price of Gold continue to move higher? At this moment, technical analysis cannot provide a clear answer because drivers of the price are not coming from normal market conditions. The price is driven by the fear of investors whether they will be able to sustain the value of their capital in the uncertain markets. It would be also important to note that Gold has shortly lost its correlation toward the USD. As the situation calms down, the price of Gold should return its correlation and balance which could be around level of $1.950. In summary, some short relaxation of the gold price might be expected, however, if geopolitical and economic risks persist, then gold indeed could move to the higher grounds.
Important news to watch during the week ahead are:
USD: Fed Chair Powell Speech, Durable Goods Orders for September, GDP Growth Rate for Q3, PCE Price Index for September, Michigan Consumer Sentiment Final for October.
With the latest strong push in price, RSI reached a clear overbought side, by reaching the level of 70. Moving average of 50 days started its convergence toward MA200. With still significant distance between two lines, it is early to speak about potential cross.
Can the price of Gold continue to move higher? At this moment, technical analysis cannot provide a clear answer because drivers of the price are not coming from normal market conditions. The price is driven by the fear of investors whether they will be able to sustain the value of their capital in the uncertain markets. It would be also important to note that Gold has shortly lost its correlation toward the USD. As the situation calms down, the price of Gold should return its correlation and balance which could be around level of $1.950. In summary, some short relaxation of the gold price might be expected, however, if geopolitical and economic risks persist, then gold indeed could move to the higher grounds.
Important news to watch during the week ahead are:
USD: Fed Chair Powell Speech, Durable Goods Orders for September, GDP Growth Rate for Q3, PCE Price Index for September, Michigan Consumer Sentiment Final for October.
