The value of Forex on the futures of the precious metal declined for a fifth consecutive day providing Forex investors with great profit opportunities on the negative side. The decline in the value of gold is further enhanced by the recent strengthening of the dollar. Silver and other metals, on the other side, retreated. Gold declined close to the psychological 1400 per ounce, intermediaries` physical holdings declined by 16% so far this year, losing 412 tons on a global scale. In case the value of the US dollar continues trending upward, Forex investors could expect the value of the precious metal to continue its decline, even though a brief correction might be possible. Institutional investors are yet to announce their holdings, by the end of the month, so the value of the commodity could potentially be significantly influenced by the numbers.
The graph clearly indicates the downward trend which originates from the beginning of the month. The numerous breaches of the Lower Bollinger Band suggest that there is a greater activity towards negative expectations, compared to positive ones. The 50 and the 200 Day Moving Averages provide solid grounds for the validity of an eventually detailed technical analysis, as the intersections of both coincides with pattern changes. The short term resistance level is set at this week` high at 1445 and an eventual breach of that level would signal that the already started correction could persist in the short to medium term. Short term support level is set at the psychological 1400 and in case the value of the metal drops below this level, Forex investors could expect the negative trend to gain even a more substantial momentum. The Relative Strength Index reads in the oversold territory so eventual short term bullish expectations could get paid off.
Disclaimer: The information in the above analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.