Gold prices have started a fourth consecutive week with a decline. The yellow metal traded more than $100 above current prices, at around $1780 per troy ounce and was close to $1900. However, investors quickly sold the asset as they were quite disappointed and turned to other more volatile and high-yielding assets.
This year the bullion is looking sluggish. It is simply behind most other assets like metals and oil. The trading range for gold is within $200 this year. So, gold prices declined twice this year to the support level of $1690-1700 per ounce, and they were close to the resistance level of $1900-1915 at the beginning of this year and in June. There were no directional movements during the rest of the year as the trading range was narrowing along with the consolidation of gold prices.
The tightening of the Federal Reserve’s (Fed) monetary policy is the hot topic of the day as the stronger Dollar has lowered interest for gold as an investment. However, in the long-term perspective gold may restore its safe haven role as inflation in the United States picks up in 2022-2023.
The upward trend in gold prices which started on August 9 was broken recently. This fact may drag gold prices down to the support level at $1725-1735. This area is also indicated by the weekly Bollinger low side of the envelope chart. So, if you’re seeking opportunity to buy gold you may find it at $1725-1735 per ounce to hedge inflation risks.
The recovery in gold prices is also possible but it is limited by strong resistance levels at $1815-1818 per ounce.
But it is hard to expect gold prices will leave the consolidation range this year. However, it would be wise to take a break now, at least before the Fed’s meeting during which a decision on tapering of bond purchases will be made on December 15.
This year the bullion is looking sluggish. It is simply behind most other assets like metals and oil. The trading range for gold is within $200 this year. So, gold prices declined twice this year to the support level of $1690-1700 per ounce, and they were close to the resistance level of $1900-1915 at the beginning of this year and in June. There were no directional movements during the rest of the year as the trading range was narrowing along with the consolidation of gold prices.
The tightening of the Federal Reserve’s (Fed) monetary policy is the hot topic of the day as the stronger Dollar has lowered interest for gold as an investment. However, in the long-term perspective gold may restore its safe haven role as inflation in the United States picks up in 2022-2023.
The upward trend in gold prices which started on August 9 was broken recently. This fact may drag gold prices down to the support level at $1725-1735. This area is also indicated by the weekly Bollinger low side of the envelope chart. So, if you’re seeking opportunity to buy gold you may find it at $1725-1735 per ounce to hedge inflation risks.
The recovery in gold prices is also possible but it is limited by strong resistance levels at $1815-1818 per ounce.
But it is hard to expect gold prices will leave the consolidation range this year. However, it would be wise to take a break now, at least before the Fed’s meeting during which a decision on tapering of bond purchases will be made on December 15.
