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Market Analysis

Are Gold Prices Going to Crash This Summer?

May 02, 2019
BY Emma Richards

Gold enjoyed a favorable few months around the start of 2019, and traders who followed the conclusions of our last FX News article on gold likely saw some very exciting profits. But now it’s Q2 and prices are plummeting. Are you one of the traders wondering just how low the price of gold will go?

Recent gold prices

Gold started its latest climb in November 2018. The rally proved to be epic and didn’t slow until the new year. Recent weeks saw contrasting highs and lows, but now a clear downtrend seems to be forming. If trend trading is one of your preferred trading strategies, then you might be tempted to place a ‘Sell’ order for the coming weeks. Before you do, take a step back.

The big picture

The golden rollercoaster is just getting started… or is it?

For 20 years, gold danced at around 377 USD per ounce. Then, in 2002, a 10-year rally kicked off which skyrocketed gold prices to 1873 USD per ounce. Gold proved to be recession-proof in 2008, earning its title of ‘safe haven’ investment. Since 2012, gold has sat comfortably in a range of 1200 – 1400 USD/Oz. Such long periods of stability within a range are one of the reasons why traders like gold so much. Another reason gold is a popular trading instrument is that there’s an almost mechanical way in which gold prices move.

Gold prices in Q2: which way are they going?

From a technical point of view, things don’t look good for gold. The majority of trading indicators suggest that gold prices will continue on the current downtrend, but we suggest you open your trading platform and see for yourself. Try doing your own technical analysis. When you’re done, compare your results with the figures below.

Current price: 1286 USD per ounce.

  • 1-week forecast: 1252 (a fall of 34 USD per ounce)
  • 1-month forecast: 1224 (a fall of 62 USD per ounce)
  • 3-month forecast: 1200 (a fall of 86 USD per ounce)

In all three forecasts, gold holds on to the current downtrend, making a ‘Sell’ order the obvious choice. But, how do these figures compare to yours?

A golden tip for analyzing XAUUSD

Without a doubt, the majority of trading experts will say that the RSI indicator is the most reliable tool for forecasting gold prices. Try the RSI and other indicators to verify your results, but remember, previous price behavior is not a reliable indicator of future shifts. FX News suggests you also review the current news and economic releases. Find something that can support your conclusions. If you don’t find anything, perhaps consider the possibility that the coming price shifts might turn out to be very different from what we’ve seen so far this year.

Try analysing XAUUSD today

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Disclaimer: the publication of analysis is a marketing communication and does not constitute investment advice or research. Its content represents the general views of our experts and does not consider individual readers’ personal circumstances, investment experience or current financial situation. Analysis is not prepared in accordance with legal requirements promoting independent investment research and Exness is not subject to any prohibition on dealing before the release of analytics. Readers should consider the possibility that they might incur losses. Exness is not liable for any losses incurred due to the use of analysis. Risk warning: CFDs are leveraged products. Trading them carries a high level of risk, so it is not appropriate for all investors. The value of investments can both increase and decrease and an investor may lose all their invested capital. Under no circumstances shall the Company have any liability to any person or entity for any loss or damage in whole or part caused by, resulting from or relating to any transactions in CFDs. © 2008—2019, Exness
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