The price of Gold extends its recovery
Geopolitical tensions have strengthened the value of the precious metal, due to Russian President Vladimir Putin’s approval of a review of his country’s nuclear policy.
In that situation, gold prices per ounce, rebounded above the $2600 level, recently breached. But they ran into resistance at the SMA around $2640.
The gold price rally appears to be being driven by the indecision in the valuation of the dollar, as markets are reconsidering the strength of the bullishness during the Trump era.
Importantly, geopolitical tensions have resurfaced due to reports over the weekend that the Biden administration has allowed Ukraine to use U.S.-made weapons, to invade Russian territory. According to the CFTC report, speculators have decreased their gold positions, to around 236.5K contracts as of November 12. The lowest level since early June. The decline in price coincided with a second consecutive drop in open interest, which could indicate that the downtrend in the commodity may be losing steam.
Current Price Of Gold
Why is the value of gold experiencing a significant increase?
Geopolitical Concerns
Amid growing geopolitical concerns, the price of gold has recovered almost 38% of the losses suffered in the first half of November. The price of the precious metal fell sharply due to the strength of the US dollar, driven by expectations of the fiscal and foreign policies promised by President-elect Donald Trump.
Raise Import Tariff
Trump pledged to raise import tariffs by 10% on all goods and lower taxes. This situation is expected to stimulate inflation and economic development
Trump’s Victory
Trump’s victory has had a clear influence on market projections regarding the direction of the Federal Reserve’s interest rates. Nomura analysts predict the Federal Reserve will keep interest rates unchanged at its December meeting.
Gold price has recovered
Gold prices have experienced a strong rebound after touching support near the 100-day exponential moving average around $2,535. The precious metal has been seen recovering around $2,635, roughly in line with the 50-day exponential moving average (EMA).
Gold prices will face significant resistance at the 20-day EMA at approximately $2,650. This will be crucial for bullish investors looking for an increase in the value of the precious metal. The 100-day EMA will act as a key support level if the price declines.
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