Gold gains despite the strong dollar

23.05.2019 03:52|Conotoxia Ltd Analyst Team

Declines in the global stock market together with an increase in risk aversion may cause investors to be willing to buy gold again, which prices have risen today by $ 10 per ounce.

Today, futures for US indices indicate a decline of over 1 percent. In turn, the Japanese yen and the Swiss franc seem to be strengthening on the foreign exchange market, as well as contracts for US Treasury bonds. This combination from different markets seems to give a clear picture of the situation in which investors are worried about the future of the global economy.

These fears may be justified, for example by today's data from the euro zone and from Germany that did not delight. Another argument could be the minutes of the last meeting of the European Central Bank, in which some ECB representatives expressed their concern at the April meeting that inflation in the euro area remains too low and expectations of price increases are falling after years of failure to achieve the inflation target. The tension between USA and China also increased after the flagship newspaper of the Chinese Communist Party published two comments attacking American moves aimed at limiting Chinese companies - said Bloomberg agency.

Thus, deterioration in sentiment may again turn investors into gold. The futures jumped today by 10 USD per ounce from 1272 USD. It is worth noting that this is already the third increase in the price of gold from this area, at the moment when the US dollar index climbed to two-year high.

Notowania złota

Chart: Gold, daily chart. Conotoxia trading platform

It seems that at the level of USD 1270 a very strong support was established and only if it is broken we may expect a larger price decrease. In turn, the nearest resistance may be set by the line drawn through the recent tops.

 

Daniel Kostecki, Chief Analyst Conotoxia Ltd.

Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal Opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.

59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Like the article?
Share it with friends!


See also:

May 22, 2019 4:44 pm

The pound falls to a fresh four-month low

May 22, 2019 12:24 pm

The dollar remains strong despite the odds of a Federal Reserve rate cut this year

May 22, 2019 9:50 am

Waiting for the minutes from the FED meeting

May 21, 2019 9:32 am

Australia – interest rates cut in June even more likely

May 21, 2019 4:37 am

Where to look for volatility in the currency market?

May 21, 2019 2:50 am

GBP/USD hits four-month low

76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.