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Gold Returned to Wide Consolidation

Olymp Trade

On Tuesday, gold lost about 2% and the decline was stopped only at $1,480. Thus, consolidation in a wide horizontal price channel of $1480-1515 continues. In the short term, we can expect the quotes to return to the equilibrium mark of $1495 per ounce, and trading will concentrate in the area of $1480-1495.

The Tuesday decline was accelerated by better than expected data on ISM Non-Manufacturing PMI. This week, the media have also reported that the US and China are almost ready to sign the phase one of the trade deal. It is possible that the United States will even cancel an increase of tariffs on Chinese goods scheduled for September.

According to the World Gold Council, Q3 global gold demand decreased by 3% in 2019. One of the main reasons for this is the high price of the metal. The demand for gold backed ETFs increased. However, demand for jewelry decreased by 16% compared to 2018, and it fell for by 50% for gold coins and bullion products. At the same time, the amount of cash invested in gold increased in Q3. It is up 24% compared to Q3 of 2018, and up 9% compared to Q2 of 2019.

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Source: https://olymptrade.com/
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