Gold prices stalled near their four-weeks low on Tuesday as robust economic data from the United States and China tempered concerns of a global slowdown, boosting the dollar and riskier assets. Thus, the safe-haven gold lost ground and bears gained control of the market.
Spot gold was up by 0.1% at 1,288.53 USD per ounce, having touched its lowest since March 7 at 1,284.76 USD earlier. The US gold futures fell about 0.2% to 1,292.30 USD per ounce.
Gold continues to struggle with the bullishness we are seeing across the other sectors. Today, the primary driver is the continuous strength of the US dollar.
Indicating investor sentiment, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell by 1.5% on Monday, their biggest one-day percentage decline in a month.
The 1,275-1,280 USD zone remains the key area of attention and a break below that could signal a deeper correction.
Among other precious metals, spot palladium was down by 1.2% at 1,402.50 USD per ounce. Silver slipped by 0.4% to 15.04 USD per ounce, while platinum was up by 0.2% to 848.95 USD per ounce.
Global gold demand will reach a four-year record in 2019
World demand for gold in 2019 will reach the highest level in four years. According to the analysis, the higher demand from jewelers will compensate the declining purchases from the central banks.
This year, the world will need 4,370 tons of gold, which is the largest ever since 2015 and a little over last year’s 4,364 tons. The analysis report shows that the precious metal prices will be on average 1,310 USD per ounce this year, from 1,268 USD last year. At present, the price is around 1,300 USD.
Gold demand for jewelry will rise by 3% this year to 2,351 tons. India will register 7% growth, and China will increase by 3%. The two largest markets will compensate for the decline in the Middle East.
The purchases from central banks, which jumped 75% in 2018, will drop by 9% this year to 600 tonnes.
The demand for investment gold will remain unchanged at 1,082 tons.
The prices of precious metal will be supported by a temporary suspension of US interest rates hikes as well as political and economic instability around the world.
Traditionally, investors turn to gold during uncertainty. Higher interest rates are overpriced because they make gold less attractive to investors. The more expensive dollar will suppress demand from buyers using other currencies.
Gold price analysis
During trading yesterday, gold fell from 1,292.03 USD to 1,287.41 USD per ounce. The price of gold slide lower in the previous day and closed near Friday low. It is a bearish sign and there is follow through today by the bear. However, no significant lower low printed on the chart yet.
This morning it traded at 1,288.53 USD.
If today the gold overcomes the resistance zone 1,292.74-1,294.12 USD, it will head to the zone 1,300.14-1,300.83 USD. Upon success, the upward movement will continue to 1,303.39-1,304.77 USD.
The short positions are best taken near 1,300 USD or when breakout below 1,280 USD happens. If the gold falls below the support zone 1,283.47-1,282.09 USD, then the next support will be the zone 1,279.53-1,278.84 USD. In case of a breakthrough, the downward trend may continue to 1,272.82-1,271.44 USD.
Silver price analysis
During trading yesterday, silver fell from 15.09 USD to 15.08 USD per ounce. However, the bear has an upper hand and might trigger a sudden breakout.
This morning it is traded at 15.04 USD per ounce.
If today the silver overcomes the resistance of 15.16-15.17 USD, it will head to the zone 15.25-15.25 USD. Upon success, the upward trend will continue to 15.30-15.32 USD.
If the silver falls below the support area of 15.02-15.01 USD, the next support will be the zone 14.96-14.95 USD. In a breakthrough, the downward trend will continue to 14.87-14.86 USD.