Gold is near the 1995.00 USD price as of this writing. Readers are urged to check the price of Gold as they look at this article to see what has happened since publication. The U.S. is celebrating the Thanksgiving holiday and trading volumes in the broad financial markets will be light today and tomorrow, as many financial institutions do not participate. However gold as always is intriguing speculatively on a daily basis, and regarding its value as a barometer in global economics and risk taking.
Gold was near its current values in late October as risk adverse conditions mounted regarding concerns developing in the Middle East. But as the crisis has been largely digested by financial institutions and major players, the price of gold has seen a dynamic trading range emerge the past month which highlights some fundamentals which should be considered, and treated as speculative thinking by others.
2000.00 USD per Ounce is an Important Psychological Level for the Precious Metal
As the price of 2000.00 is flirted with via buying and selling momentum in gold, traders should consider that while risk adverse conditions via global concerns have subsided for the moment, that risk appetite has suddenly increased on the notion the U.S Federal Reserve may actually begin to present a different outlook compared to their aggressive monetary policy stance heard the past year and a half.
The sudden shift in outlook regarding the USD and its potential direction has also affected the gold market. When gold charts are looked at over the past few years, as the USD has gotten stronger in many cases, gold has gotten weaker. And on the opposite side of the coin, when the USD has gotten weaker, the precious metal has gotten stronger.
- Gold hit a low of nearly 1927.00 USD per ounce on the 13th of November after the October highs, this as global risk adverse concerns calmed, and traders focused on the strong USD.
- However, since the publication of weaker than expected inflation numbers from the U.S via the CPI and PPI reports in November, gold has gotten stronger as the USD has gotten weaker.
- Important resistance levels lurk near 2000.00 USD for gold long-term. Yes, gold traded near the 2050.00 ratio in early May of this year and even spiked momentarily towards the 2100.00 USD level. And it did trade over 2000.00 USD this week too.
Gold: Always Speculative in the Short-Term, Always Desired in the Long-Term
Gold remains one of the most speculative assets to trade in the world. The precious metal moves on sentiment generated by large players who can manipulate short and near-term prices causing sudden spikes. However long-term, gold is almost always sought by large financial institutions and some major central banks as a ‘security’ to weather potential economic storms and create a sense of comfort knowing its value remains important in the psychology of investors.
Be careful with gold the remainder of this week due to the U.S holiday, but if the precious metal can climb above the 2000.00 level and sustain prices for a solid duration it might spark additional buying, particularly if the USD continues to show signs of weakness.
Gold Short-Term Outlook:
Current Resistance: 1999.00
Current Support: 1988.00
High Target: 2011.00
Low Target: 1977.00
Ready to trade today’s Gold prediction? Here’s a list of some of the best XAU/USD brokers to check out.