Since last year Gold is up more than 22%, that is a massive move from $1269 to the current price at $1486.
Given the evident rising geopolitical tensions, traders become more sensitive to headline the risk. Even a small story could act as a catalyst for buying pressure in all safe havens.
After Trump announced more China tariffs and Chinese intervention in Yuan after that, and suspension in purchases in agricultural products from the US, gold has risen “just” 5%. Such a move is not something that we didn’t sow before in gold and will not be the last time. The quest right now is what is next?
Is it possible to see gold at $1577 any time sooner?
Let us take a look at what the price movement and technical analysis have to say.
This is a monthly chart for gold ( XAUUSD).
Strong up movement from the beginning of the year is more than evident. Will the price continue to rise is possible, but from a technical analysis point of view, it is to expect some contraction in future price movements.
The reason for that can be found in current RSI values, prices distance from Moving Averages, Bollinger Bands behaving, and Fibonacci 50 level. Note one more time that this is a monthly chart.
On the weekly chart, we can see RSI is an extremely overbought area with a value of 83. The price is tick above Fibonacci 50 level, and the price difference from MA200 is 11%. This difference has her importance cause for reliable trend motion it is the best to have the price in a range from 1% to 3% from MA200.
On a daily and H1 chart, we have more or less the same story. The difference is, we had false divergence signal, as can be sown with green lines on D1 chart. Precisely this can show us how gold can rapidly react to the news.
We will closely watch will the price holds above Fibonacci 50 level, or not, and will we have some coolness in tensions geopolitically and in the markets.