Analysts speak: Another good week for Gold

Discussions about where gold prices will go in the near future are getting more and more heated. After a less-than-impressive performance in Q4 of 2015, the famous precious metal has known some good recent developments in 2016.

In the last quarter of 2015, gold went from hitting some good levels almost nearing the $1200 line to collapsing to multi-year lows twice around the price of $1044. This was most of all linked to the main interest rate of the Fed. The inverse correlation between the U.S. Dollar and the yellow metal is well-known for quite some time now, so the below-average performance was not a surprise for everyone.

2016 did bring some better news, though. After the double bottom at the end of last year, Gold prices profited from some less-than-ideal news for the dollar and skyrocketed to break 2015 Q4 records and finish the first rally at the $1260 line. Prices dipped for a short while and rested on the $1200 support which has previously acted as a strong resistance, and we’re now looking to where the precious metal will go next.

Analysis from all over the world viewed this dip as the perfect opportunity to go long again. With no good news coming from the U.S. just yet and the crisis in world equity markets deepening with every day, more and more investors will consider Gold a safe haven and acquire larger and larger quantities of it. Most investors agreed that next week will bring new growths in prices, for all the right reasons too: usually, when technical indicators (a very nice consolidation pattern, in this case) agree with fundamental news, there is no reason why this trade should go wrong.

To sum up, the conclusion the analysis came up with can be summed up easy. Oil is still weak, the European economy is still trailing well behind its schedule and there is no good news coming from the U.S. All the more reason to invest in Gold!

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