Gold is trading in a mid-term correction in the form of a descending triangle since the end of February. The buyers’ zone is $1280-1285 per troy ounce. The likelyhood of the price entering this zone looks quite strong. The asset is testing it, so its current position can be considered as a good entry point for a long position.
The downtrend line, which is the second side of the triangle, was already tested by bulls on March 25 and April 10. It is believed that such a triangle is a figure of trend continuation. In this case, the uptrend and breach happened after figure formation around 50-75%. If the classical rules of technical analysis hold true, the bull trend will happen very soon.
In addition to the known geopolitical factors, gold prices may be supported by the mining situation in South Africa. In February, production fell by 21%, and this is already the 17th consecutive month of decreases. South Africa is one of the largest gold miners in the world.
Meanwhile, in Russia, the third largest gold mining country in the world, authorities are going to abolish VAT on the turnover of chemically pure precious metals, including gold. The abolition of tax should stimulate domestic demand and turnover growth since it is primarily products for investment - coins or bars that can be stored in banks.