Technicals & Sentiment :
We are in an uptrend but the sentiment is still , at 1215 a nice place to set a buy with a good Risk/Reward ratio.
Dovish comments from Fed Chairman Jerome Powell and Atlanta Fed President Raphael Bostic could hint at a shift in and subsequently bolster gold’s position.
WHAT DRIVES THE GOLD PRICE?
Given the importance of the gold price to the global marketplace, it pays to understand the factors that determine its value:
Stability - As the bedrock financial instrument underlying global currencies, gold is considered a fairly secure asset. Its price tends to rise in times of turmoil, as governments and investors turn to it as a hedge against uncertainty. Inversely, gold prices usually drop in stable times, as riskier yet potentially more profitable avenues of investment become more viable.
Supply and demand - As with most assets on the open market, an excess of demand for gold (normally for jewelry-making, or manufacturing certain medical, industrial and technological products) drives up the gold price (assuming supply is constant). On the other hand, a weakening of demand often has the opposite effect on its value, sending the price lower (assuming supply is constant).
Correlation with the USD - The US dollar remains the benchmark pricing mechanism for gold . When the value of the US dollar increases, gold becomes more expensive for other nations to purchase. This ultimately causes demand to fall, which is why there’s generally an inverse relationship between the US dollar and the gold price. Additionally, when the dollar starts to lose its value, investors look to gold as a safe-haven alternative and this helps to push its price up.
Central banks - Many of the world’s gold reserves are controlled by central banks within developed nations, in locations such as Europe and North America. As a result, these banks wield immense pricing power in global gold markets. If the banks suddenly increased or reduced their gold exposure at once, even slightly, this would have a magnified effect on the gold price. Central banks therefore rely on a joint (though unofficial) commitment to refrain from unilaterally engaging in large-scale gold sales that could destabilize global markets.
ETFs - While exchange traded funds are generally intended to mirror the gold price rather than influence it, many large ETFs hold a significant amount of physical gold . Therefore, the inflows and outflows from such ETFs can affect the metal's price, by altering the physical in the market.