Gold Shows Resilience

Gold Shows Resilience

Ekaterina Seredinskaya  | Feb 11, 2019 12:07

Gold prices finished last week on the offensive, though closed in the red. The metal managed to stay above the $1,300 level during the pullback from highs. The main catalyst behind the bearish correction was strength of the dollar that appreciated nearly across the board. Meanwhile, some overbought conditions added to the selling pressure.

However, the uptrend from mid-November remains intact, and the correction from late January could come to a conclusion as soon as dollar demand begins to abate. As the market focus is on the global growth outlook which is worsening, the safe-haven gold demand will likely persist on broader terms. But in the short term, the bullish attempts will likely be limited due to the remaining dollar demand.

Technically, the key on the downside is still the $1,300 level as a break below will result in a cloudier outlook. As long as the precious metal holds above the psychological level, there is a scope for a recovery towards $1,320 and higher.

This week, investors will focus on the next round of US-China trade talks. Failure to make a significant progress towards a deal will fuel risk aversion and could support the bullion, while the threat of another US government shutdown after a February 15 deadline could hurt the dollar and thus lift the yellow metal more substantially.

Ekaterina Seredinskaya

Related Articles

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (India) English (Canada) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 中文 香港 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes