The gold price is still in a phase of consolidation. The price of the precious metal has recently stabilized in a more optimistic overall market environment. However, the pressure on the gold price is likely to continue in the short term.
Gold price recovers slightly
The gold price has stabilized somewhat after the recent downward movement. After reaching a three-month low at 1,455 US dollars last Monday, the troy ounce of gold cost 1,468 US dollars again at 10:30 this morning. This was equivalent to 1,335 euros. Was it the consolidation or is the short-term development still dominated by the bears?
Is the trend continuing?
In last Tuesday’s article we analysed the seasonal market weakness of the past five years. From this point of view, things could become uncomfortable again by the end of the year. Also because another US interest rate decision is due on 12 December. Most recently, the Federal Funds Rate was lowered by 25 basis points three times in a row. And the economic outlook has brightened somewhat recently. This also applies to the German economy.
During his speech to the New York Economic Club on Tuesday, US President Trump had promised that a partial agreement would soon be signed in the trade dispute with China. Meanwhile, Fed President Jerome Powell said at yesterday’s first congressional hearing that the current US interest rate level is likely to be appropriate until further notice. Today, Powell will speak to the House of Representatives Budget Committee about the economic outlook. Tomorrow, the U.S. is expected to provide significant economic data (retail, industrial production).
From a chart technical point of view, the gold price (in US dollars) is still in a downward trend channel from its high for the year of 1,552 US dollars. The most significant short-term resistance is 1,500 US dollars. Towards the downside, there is marked support at 1,424 US dollars. From today’s perspective, a significant decision as to direction would only be made if one of the two levels were breached or exceeded.