The price of gold made a significant move during the previous week toward the ATH, however, this level has not been reached. Instead, the highest weekly level was $2.420, while ATH stands at $2.430, reached in April this year. There are generally two reasons why this move occurred. On the one side were posted US inflation data, which were in line with market expectations, and a bit lower from posted data in March. This pushed the market optimism that the Fed might eventually make the first rate cut in September this year. Additional impact was made from China. Namely, based on the latest economic data for China, analysts are of the opinion that China's monetary authorities will make adjustments to their monetary policy in order to boost the economy, in which sense, measures in terms of banks’ reserve requirements and interest rates are currently expected in the near future period. As investors from China are among the highest gold buyers, and there is general positive sentiment when it comes to the price of gold in the future period, the market pushed the price of gold to higher grounds on Friday`s trading session.
With the latest push in price, the RSI reached the level of 66. This level is quite close to the overbought market side, which leaves some space for the price of gold to move toward a higher ground in the coming period. Moving average of 50 days continued to diverge from its MA200 counterpart, and not providing any kind of indication that the convergence might start any time soon.
Current charts are showing that the price of gold has still some space for a move to the upside. This would most probably mean a new ATH for the gold. Still, when the RSI reaches the overbought market side, it would mean that the price could enter into short term reversal. The first level in this sense could be the $2.300 short term support line. Still, it should be considered that the market is currently under the hype of potential Fed's rate cut, in which sense the weakening of the USDollar should also be accounted as a potential trigger for the price of gold during the week ahead.
With the latest push in price, the RSI reached the level of 66. This level is quite close to the overbought market side, which leaves some space for the price of gold to move toward a higher ground in the coming period. Moving average of 50 days continued to diverge from its MA200 counterpart, and not providing any kind of indication that the convergence might start any time soon.
Current charts are showing that the price of gold has still some space for a move to the upside. This would most probably mean a new ATH for the gold. Still, when the RSI reaches the overbought market side, it would mean that the price could enter into short term reversal. The first level in this sense could be the $2.300 short term support line. Still, it should be considered that the market is currently under the hype of potential Fed's rate cut, in which sense the weakening of the USDollar should also be accounted as a potential trigger for the price of gold during the week ahead.
