- summary:
- The price of gold has returned to the upper direction after three consecutive days in red. But why did it decrease despite the trade war?
The gold price has cut a three -sessions losing, and gained 1 % for trade at $ 3,013 at the time of this report. The recovery was seen in the broader financial markets, as renewed optimism in commercial tariff negotiations at the lead center. The commodity has decreased by 3.3 % in the last three trading sessions, while taking a position against its location in a safe haven asset.
Why did the price of gold decrease?
Many investors have found themselves in AA confusion with the price of gold joining the lower direction in recent days. Usually, the assets of safe haven are estimated when the stocks decrease, as investors seek to expand themselves from the risks of the market. However, gold has been in the landing direction for the largest part since US President Donald Trump announced mutual definitions.
The potential explanation for abnormal behavior of gold is that the sharp decline in stock markets has prompted institutional investors to sell their alloys to cover the requirements of margin. For context, the S& P500 and Dow Jones index has decreased by more than 9.5 % in the last five trading sessions. Such a sharp loss in a short period can expose many merchants to the risk of calling unexpected margin.
However, the price of gold is likely to resume the bullish direction as central banks enhance their cellars against the increasing risks of potential global stagnation. For example, China bought 0.09 million ounces of gold in March, while maintaining the purchase line dating back to November 2024. More central banks are likely to join the battle in the coming weeks if the war of commercial tariffs escalate. It would add windwinds to the price of gold.
Gold price prediction
The price of the gold price axis is $ 3,003, and the RSI is preferred to continue in the upward trend. The bulls are likely to face the first resistance at $ 3,020. It will break a stronger momentum above this level and test 3,032 dollars.
On the contrary, breaking less than 3,003 dollars will prefer sellers to control. This first supported support can witness $ 2,992. The collapse under this level will be invalidated to narrate the upper direction. Also, this momentum can pay the price less to test $ 2,976.
