The price of gold was holding during the week, reaching its highest weekly level at $2.380. However, Friday`s trading session brought some negative sentiment to this market, which was both impacted by the US jobs data and moves from China. Namely, on one side the US posted data showed further weakening of the US jobs market, where the unemployment rate was increased to 4.0% in May from 3.9% posted for the previous month. This has supported USD to strongly gain in value, as investors are expecting for the Fed to cut interest rates to support the economy which is weakening, and sustain the job market. On the other side was the decision of the Bank of China to hold further gold purchases in May, after it spent the last 18 months in buying.
The price of gold dropped sharply during the Friday`s trading session to the level of $2.292, where it is finishing the week. The RSI reached the level of 41, indicating that the market is currently eyeing the oversold market side. On the other hand, it might be an indication that the price of gold still has room for a move toward the downside, until a clear oversold market side is reached. Moving average of 50 days continues to diverge from its MA200 counterpart, without an indication that the convergence might start soon.
The week ahead is bringing FOMC meeting and rate decision, which is usually a period of time with increased market nervousness. In this sense there is a higher probability that the increased volatility might continue for another week, in case that the Fed officials provide some new information which is not currently priced by the market. As per current charts, there is some probability for the price of gold to move to the lower grounds. However, it might be within a larger time frame. As for the week ahead, the price of gold will start the week by testing the $2.300 support line. A move to the upside is possible, but most probably not higher from $2.350.
The price of gold dropped sharply during the Friday`s trading session to the level of $2.292, where it is finishing the week. The RSI reached the level of 41, indicating that the market is currently eyeing the oversold market side. On the other hand, it might be an indication that the price of gold still has room for a move toward the downside, until a clear oversold market side is reached. Moving average of 50 days continues to diverge from its MA200 counterpart, without an indication that the convergence might start soon.
The week ahead is bringing FOMC meeting and rate decision, which is usually a period of time with increased market nervousness. In this sense there is a higher probability that the increased volatility might continue for another week, in case that the Fed officials provide some new information which is not currently priced by the market. As per current charts, there is some probability for the price of gold to move to the lower grounds. However, it might be within a larger time frame. As for the week ahead, the price of gold will start the week by testing the $2.300 support line. A move to the upside is possible, but most probably not higher from $2.350.
