Gold’s price has been falling since last week. An attempt to break through the psychological level of $1300 per ounce turned into a complete surrender of the bulls and the uptrend never began. The main reason for this was the strengthening of the US dollar. DXY index has strengthened by almost 1% over the past 7 days. As a result, gold quotes returned to the range of medium-term downward movement, in which the asset has been trading since the end of February. The spot price is near the cryptically important support level of $1266. If this level is broken, then a new wave of sales will begin with possible targets around $1235. The oposite scenario seems less realistic - uptrend can only be thought of if bulls confidently return to the $ 1295-1300 zone.
The main drivers of gold growth as we know are geopolitical crises. Investors are buying metal as a safe haven asset. However, this is not happening now, although there are plenty of crises.
Of course, trade tensions between China and the US eased somewhat after the States temporarily lifted sanctions on Huawei. Nevertheless, on Tuesday, Chinese President Xi Jinping hinted that the trade war with the United States will not end in the near future. Further, the unstable Middle East, where fighting might possibly begin against Iran, should also push the price of the safe haven assets up.
But apparently the critical mass of the negativity is not enough for a moment, or investors have iron nerves. But while the dynamics of gold are dim, despite all the geopolitical turbulence. The market is not in a hurry to buy it, which means the decline is likely to continue.