Potential for +$170 upside move or will Gold drop -10%?
Gold investors stuck between US-China trade war uncertainty and the potential for higher inflation as global central banks move to cut interest rates.
- Gold price downside risk seen with hints of positive news developments from the ongoing US China trade talks; any positive trade talk outlook helps to increase demand for risk assets while adding downside pressure for safe havens such as gold;
- Gold price upside risk seen as global central banks move to cut interest rates in synchronization. This may lead to higher gold price as lower interest rates may boost inflation; thereby driving investors to buy gold as an inflation hedge;
Technical analysis: Daily Chart. Gold price trending lower since early September 2019. Gold has fallen around -7% since its September $1,557 high. Current price $1,483. Rate of Change (ROC) downside momentum could begin to slow as gold starts to look oversold. Potential bullish flag pattern in development. Provided the pattern proves to be valid upside could be towards the $1,600 - $1,630 areas, otherwise a failure for price to hold above the $1,430 support could open up a move lower towards the $1,320’s.
Source: FXGM Investment Research department / Bloomberg data