The recent breakout in gold prices towards a maximum intradica of 2942 was due to the recent increase in commercial friction since central banks continue with their gold purchases (China for the third consecutive month). The gold was last seen at levels of 2892, the FX analysts of OCBC Frances Cheung and Christopher Wong point out.
A downward retraction is likely
“But in the short term, there is space for a retraction. In a semiannual testimony before the Senate Banking Panel during the night, Powell said there is no hurry to cut the rates. This implies that the high rates for longer can remain and result in a higher opportunity cost associated with maintaining gold. This comes in a timely manner to maintain the recent increase in gold under control for now. ”
“The upward impulse in the daily graphic remains intact while the RSI was moderated from overcompra conditions. A decrease retraction is likely. Support in 2860, 2792 (21 DMA). BIE TO BUY IN THE FALLS. Resistance in 2942 (recent maximum), levels of 2960. We remain constructive on the perspective of gold in the middle of the friction/ global commercial uncertainty. ”
“The possible increase in debt in the United States can bring back the delarization narrative, which would increase the demand for gold. In addition, the continuous purchases of gold by the central banks are also another factor that supports prices of gold. Most central banks are still flexible monetary policy, although at a slower pace.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
