Gold Price Outlook: Should Low Risk Appetite Investors Wait for Decline‬?

The gold price had fallen as the global market due to positive March US housing starts and industrial production figures. The gold had rallied last week due to increased tensions over Syria and U.S. sanctions on Russia. As a result, there was fall in global stocks and the investors with low risk appetite took position on gold.  The tensions have eased this week but the concerns over Russia sanctions plans are still there. However, investors are reluctant to get out of their gold positions.

Additionally, the U.S. yield curve got flat after the White House said U.S. President Donald Trump has planned to nominate Richard Clarida as Federal Reserve vice chairman. A flat yield curve generally reflects views that the Fed plans to lift interest rates in the near term. This also reflects the concern over the macroeconomic outlook. Higher rates generally leads to fall in the price of gold.

In addition, the  fall in the political risk has added pressure on the gold price. South Korea and North Korea would hold talks for potentially a peace agreement. Further, Netflix , Morgan Stanley and Goldman Sachs this week has declared strong earnings that led to rise in price of stocks.

Gold Price Chart

Gold is trading in the range between $1333.58 and $1356.75. Green line is 100 SMA (H4), and has crossed from below, which means that the gold price is bullish for a short time period. The Gold faced resistance at $1,350-70 level. If the gold price rise above $1,370 then the gold price may move up to $1,400, at least. If gold can pass this resistance, the upward trend will get confirmed and the price could be even stronger.

Further, the gold market has seen profit booking after the gold hit two and half months high last week

Gold Price Outlook

Gold prices are expected to trade sideways. The investors can take position on dips but with the stop loss. Generally geopolitical tensions have a short-term impact on the gold price movement, but overall it is the global economy that determines the prices of gold. Meanwhile in India, the gold price had moved up slightly on the back of increased demand by the jewelers on the eve of Akshya Tritya.