Recovery after reaching a five-week low
Gold opened the reporting week at 1,254 $/oz and lost 10 $/oz on that same trading day. Afterwards it broke through the 100-day-average at 1,243 $/oz and on Wednesday it reached a five-week low of 1,241 $/oz. The precious metal stabilized again on the last two trading days, closing the week at 1,257 $/oz. From a technical perspective, there is resistance at 1,294 $/oz in the coming trading week and support at the weekly low of 1,241 $/oz.
Gold has been in a short-term downward trend since the beginning of the month. Overall demand on futures markets has fallen a bit as of lately. Record highs on international precious metals markets have also put some pressure on prices. After oil prices quickly dropped to a nine-month low this week, however, investors became somewhat more risk-averse, as a result of which precious metals - especially Gold - trimmed their losses somewhat.
The second half of the year will likely remain challenging for the Gold and precious metals market, as what has proven to be a turbulent political year is expected to continue. First, there is the G20 summit meeting in Hamburg at the beginning of July, which will feature the first major international appearance by French President Emmanuel Macron, who must now live up to the high expectations that have been placed on him. At the end of September there will be elections for Germany’s Bundestag, the outcome of which is still uncertain. The Brexit negotiations which recently got underway, Donald Trump’s policies, and the strained situation in North Korea will remain long-term issues. Another crucial issue for the price of Gold will be future interest rate decisions by the ECB and the Federal Reserve as well as the impact of such decisions on the US dollar.