The data obtained from exchange markets say that USD is getting stronger.
Experts suppose it is happening because traders do not believe that Ireland will be able to cope with the crisis even with the financial aid from the EU.
During today’s trading session at COMEX (New York) gold reached $1374.2 per troy ounce.
Howard Friend, one of the leading strategists for MigBank (a Forex broker), says gold gains in value because the EU is expected to help two more countries – Portugal and Spain. Financiers are sure that 85B euro of financial aid to Ireland is just the beginning as the Irish economy will need more funds. So traders decided to secure their capital by investing in gold, Mr. Friend explains.
It should be reminded that gold has already been gaining in value for 10 years (it is a 100-year record). Only this year its price has increased by 25%. It is connected with the financial and economic crisis in the world. Investors prefer precious metals to unstable currencies and stocks.
Having analyzed the situation on the daily chart of gold Andrei Mikhalets, an analyst for the Department of Market Sentiments, Masterofrex-V Academy, made a conclusion that there was volume testing with an upward rebound accompanied with active purchases. The gold buyers secured level $1350. In addition to all, a sharp downward retracement at increased volumes testifies that the weak players left the game. Such a situation allows us to consider that the upward movement will continue. The closest resistance level is at $1400. The scenario will be canceled if the price falls below $1350 and settles there while coming out of the sloping channel.
In terms of fundamental analysis, gold follows a bullish tendency as the market participants are in panic because of the Euro news, treating gold as some kind of “safety cushion”. However, the uptrend of gold may be restrained by a fairly strong US dollar (which makes all products get cheaper).
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