After Gold prices experienced a downward trend which was also the commodity’s biggest decline in a span of three years following a robust economic report from the U.S. and the report on the December rate increase by Federal Reserve Bank of Cleveland President Loretta Mester.
The drop was also led by a stronger dollar also driven by a strong U.S. data. The US dollar then gained 1.2% at Tuesday’s close to ¥102.89 which is the highest since last September 5. The slump in the price of Gold recorded at almost 3% was also reported to be their biggest drop since the Brexit vote where investors have shifted their eye in US interest rate hike prospects.
Currently, Gold has risen by 19%. For October, the price of gold has dropped by exactly 3.3% at $1266.30 each ounce of the precious metal. Last Tuesday’s close showed a drop in the prices to $1270.4 level.
The precious metal has recorded their lowest decline during last Tuesday’s trading session as the dollar rose against the yen with the price recording a 3% loss with an ounce being priced at $1266.30. Silver also experienced a loss of 5.8% to $17.71.
Now after six consecutive trading sessions in a downward trend and the most recent sharp drop at last Tuesday’s close, the price of yellow metal rallied after almost three months of decline. The RSI Indicator has also sharply turned and pointed upwards just enough to indicate a potential buy signal as it is almost breaking out of the 30 level.
This also comes next to the prospect that due to the strong economic data, the US Federal Reserve and the central bank would be announcing an interest rate hike before the year ends.
Despite a weak prospect in an eventual rally and investor expectation that the sudden rebound in the price of gold might be short-lived, analysts are still stating the chances of a good gold price even if the price drops to a $1,172 level. Metals currently are at a $1,273.86 price per ounce following a drop of 3.3% during Tuesday’s close.
The gold is also still a long way to go in recouping back all of the losses it incurred from the downward trend in the past week. Regardless of the losses, investors are still faced with a number of factors to stay such as undesirable interest rates in other countries and the U.S’s low inflation rate.