(Kitco News) – The gold market is struggling to search out momentum initially of the week and a few analysts see the prospect for decrease costs within the close to time period.
David Tune, foreign money strategist at DailyFX.com, stated in a report Monday that as geopolitical tensions ease, the gold market might be ripe for technical profit-taking as short-term momentum begins to shift.
“[The Relative Strength Index] might flash a textbook promote sign over the approaching days because the oscillator struggles to carry in overbought territory,” he stated within the report.
Tune added that after gold’s failed tried to shut above $1,591 an oz, he’s watching a retracement stage at $1,509 as a important assist stage. His feedback come as gold costs see some modest promoting stress. February gold futures final traded at $1,551 an oz, down 0.58% on the day.
“[Gold needs] an in depth above $1,591 to convey the topside targets again on the radar, with the primary space of curiosity coming in round $1,625 to $1,634,” he stated.
Tune isn’t the one one watching the $1,500 stage. Technical analysts on the Swiss buying and selling agency Dukascopy stated that if gold pushes under $1,540, then they see costs converging to the dear steel’s 55-day and 100-day shifting common round $1,500 an oz.
“For a time being, it seems, on the every day candle chart, {that a} retracement down ought to happen as a result of steel being overbought,” the Swiss analysts stated.
Though gold costs might nonetheless transfer decrease within the close to time period, Tune stated that the fundamentals nonetheless assist increased costs by means of 2020. He famous that rising issues of disappointing financial development this 12 months will preserve rates of interest low.
“Geopolitical dangers paired with hypothesis for decrease curiosity might preserve gold costs afloat as market contributors search for a substitute for fiat currencies,” he stated.
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