The precious metal regains its positions from the previous 1,459 USD as the ISM Manufacturing survey marks its lowest price since 2009.
Gold Price Charts
The prices remain predictable as the RSI tracks the bearish trend observed during the previous months. The latest figures indicate a near-term correction as the charts keep showing a downward trend.
Some strategists state that the rollback happened after the RSI exceeded 70 in August. Sometime later, the oscillator fell below the previous minimum which indicates the fading of the growth impulse.
- The prices have already grown by almost 20% since the beginning of 2019. Analysts still argue whether it will gain another 25% by the end of the year.
- In August, Comex gold futures reached a six-year high of 1,565 USD per ounce. Analysts from Investing.com suggest an active purchase of gold futures. Goldman Sachs analysts believe that prices may keep rising as banks and ETFs continue to buy gold.
- Although there is no assurance that gold will reach its record highs by the end of 2019, the trade wars and many other risks like the conflict between the US and Iran support the bulls’ optimism.
The markets still consider the reduction in rates by 25 basis points at the meeting of the US Federal Reserve.
4Q 2019 Forecast For Gold
Gold is likely to continue its upward trend, and there are good chances to maintain positions at least until the end of the year.
The prices went up in the first half of the 3rd quarter. The dynamics of the USD also had had an effect on the quotations of the asset. The volatility index in August reached a peak from the beginning of 2019. In October, the United States and China are planning to resume trade negotiations at the highest level, and that will determine the global risk for investors.
In the 3rd quarter, the investors’ interest in gold continued to grow. According to the U.S. Commission on the derivatives trading (CFTC), a number of contracts grew to 300 thousand, and at the end of the month reached 312.40 thousand. Back in April of this year, the indicator was a little over 37 thousand contracts, after which it was growing steadily. The current situation warns of the risks of a strong fall in gold prices in the event of the liquidation of long positions.
The U.S. Federal Reserve reduced the interest rate by 25 basis points each, bringing it to 1.75-2% per annum. As a result, gold received additional support due to lower opportunity costs compared to such assets as the U.S. government bonds. However, the Central Bank did not give any clear signals regarding other interest rate cuts this year.