The strength of the US dollar pushed the gold prices to the 1207 level per ounce, the lowest level for gold for a month. The Federal Reserve is fixed on continuing the interest rate rise, and therefore, the US dollar strength resumed, increasing the bearish pressure on gold. The gold didn’t enjoy recent gains which pushed the value to the resistance level at 1237 an ounce with the US dollar resuming its strength, even after the announcement of the final results for the midterm elections for the US congress, and the great win of the US democrats, but Trump eased the fears and said that he will cooperate with the democrats to the best interest of the country.
Contributing to the recent gains of gold was the weakness of the US dollar and the fall in the US stock markets and the escape of investors towards the safety of gold. Gold did not benefit from the renewed Trump’s criticism of the Federal Reserve’s policy, as he described it as if the bank has gone mad, referring to the bank sticking to more interest rates hicks. Trump described the fall in the US stock market as a natural correction after the recent record gains. The strength of the US dollar will remain a downward pressure factor on gold prices.
Technically: Gold prices today will reflect the current bearish outlook if gold returns to test the 1215, 1227 and 1236 highs respectively. On the downside, testing the psychological support at 1200 will open the way to test stronger bearish areas that could reach 1192, 1185 and 1160 respectively. We still prefer to buy gold from every bearish bounce.
Economic data: The yellow metal will focus on the level of the US dollar. Gold will also be affected by investors’ appetite for risk, as gold is one of the most important safe havens. Gold will monitor renewed global geopolitical concerns about North Korea, Britain’s exit from the EU or Trump’s economic policy.
