Gold: overbought, again
The price of gold managed to pass the $2,7K level during the previous week, despite the strengthening of the US Dollar. The price of gold was again under the influence of geopolitical tensions in the Middle East, which have impacted the price of gold on many occasions during this year. On the other side are uncertainties related to the US Presidential elections, which are due within the next three weeks. Gold reached the new all time highest level at $2.720, where it is closing the week. Only within the previous week, the price of gold gained 2,4%.
The RSI reached the level of 72, which is a clear overbought market side. Under normal market conditions, this would be an indication of a potential reversal. However, considering that the current up trend is a result of investors' fear of geo-tensions, the reversal might be questionable at this moment. Moving averages of 50 and 200 days continue to move as two parallel lines with an uptrend, without any indication of a potential change in the trend in the coming period.
As previously noted, investors' fear is currently pushing the price of gold to the upside, in a quest for a safe-haven asset to protect their capital. This element is hard to put into the statistical model, in which sense, current technical analysis should be taken with a precaution. Some short reversal might be expected, after the gold reached the clear overbought market side, however, there is also probability that the gold might continue its path toward the higher grounds.
The RSI reached the level of 72, which is a clear overbought market side. Under normal market conditions, this would be an indication of a potential reversal. However, considering that the current up trend is a result of investors' fear of geo-tensions, the reversal might be questionable at this moment. Moving averages of 50 and 200 days continue to move as two parallel lines with an uptrend, without any indication of a potential change in the trend in the coming period.
As previously noted, investors' fear is currently pushing the price of gold to the upside, in a quest for a safe-haven asset to protect their capital. This element is hard to put into the statistical model, in which sense, current technical analysis should be taken with a precaution. Some short reversal might be expected, after the gold reached the clear overbought market side, however, there is also probability that the gold might continue its path toward the higher grounds.
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