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Gold holds on around $1220 and looks ready for correction

Jul 25 2018, 01:51 PM (+06) | Fortfs.com

On Tuesday, gold was able to resume upward movement amid some USD dollar weakness. However, precious metals continue to hold at the current levels, but this creates good grounds for continuing growth. USD dollar remains the main factor determining the gold market dynamics, and weaker USD dollar creates prerequisites for the development of a more large-scale correctional upward move. Apparently, Donald Trump verbal interventions had their effect and for several trading sessions in a row the dollar does not show intentions to recover to the annual maximum where USD dollar index was trading up to the critical remarks of the American president. Later, the US Treasury Secretary somewhat calmed markets, but investors are still cautious preferring to avoid ambulating longs in USD dollar. However, we once again admit that fundamentally and economically situation has not changed much since the last Friday.

Another positive factor for gold prices was news from China, which supported the entire metal market. The announcement of measures aimed to stimulate the demand in China was positively received by investors, and as a result, all metals, both industrial and precious, showed positive dynamics on Tuesday.

Another main event that may affect the course of trading today is IFO business climate index for Germany, yesterday statistics from Europe had strong impact on the EUR / USD pair and European equity markets. Among the most important events in the United States today we can note the data on housing sales, experts predict a decline in the figure from 689K to 670K, which could negatively affect the US currency and support the price of yellow metal as well.

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