As the crisis in the Middle East is slowly calming down, the price of gold is ending its uptrend, in a quest to find a new equilibrium price. On this path, the price of gold first needs to find again its negative correlation with the USD, as it did during the times without significant news from geopolitics. The price of gold started the week with a strong selling side. The lowest weekly level was reached at Tuesday`s trading session at the level of $2.293. After that move, the price reverted a bit ending the week at level of $2.336.
The RSI finally exited the strong overbought side, ending the week around the level of 58. Although the indicator still did not cross the 50 line, there is evidence that the market entered into a reversal mode, where a clear path toward the oversold side could be expected soon. Moving average of 50 days still continues to diverge from its MA200 counterpart, and still not providing an indication that potential change in trend might come soon.
As the gold market is calming down, it should be expected to return to its previous course of negative correlation with the USD. It should be considered that the FOMC Meeting and Fed's rate decision will occur on 1st May, when some higher volatility on markets could be expected. In this sense, some volatility in the gold price should also follow. Current charts are showing a modest potential for the upside, at least till the level of $2.800. However, there is currently higher potential for the downside, at least till the level of $2.300, with uncertain move lower to the downside.
The RSI finally exited the strong overbought side, ending the week around the level of 58. Although the indicator still did not cross the 50 line, there is evidence that the market entered into a reversal mode, where a clear path toward the oversold side could be expected soon. Moving average of 50 days still continues to diverge from its MA200 counterpart, and still not providing an indication that potential change in trend might come soon.
As the gold market is calming down, it should be expected to return to its previous course of negative correlation with the USD. It should be considered that the FOMC Meeting and Fed's rate decision will occur on 1st May, when some higher volatility on markets could be expected. In this sense, some volatility in the gold price should also follow. Current charts are showing a modest potential for the upside, at least till the level of $2.800. However, there is currently higher potential for the downside, at least till the level of $2.300, with uncertain move lower to the downside.
