Real dollar gold prices are clinging to life just above their recent multi-week highs. This failure of bearish conviction is showing today as the market works through Tuesday’s Asian trading session. All in all, notwithstanding recent up and down action, a deeply somnolent performance for the precious metal—with no real follow through selling from detected.
In the last month of trading, gold has done very poorly. It continues to languish in the red and blows its opportunity to capitalize on its recent success. This price action suggests that investor sentiment remains very cautious, but is unable to find strong selling interest to push prices lower. Analysts have been quick to point out that this trend is indicative of some confusion among traders over gold’s immediate future.
No wonder market observers are saying that the gold price now seems to be at an important crossroads. This evident lack of follow-through selling can be interpreted as traders finally not wanting to take the plunge with the bears. Indecision can be caused by a host of reasons. Geopolitical tensions and dollar fluctuations can add to gold’s relative attractiveness as a safe-haven asset.
“Gold price keeps the red below multi-week high; lacks follow-through selling.” – www.fxstreet.com
As the Asian market continues to unfold, traders are on high alert, watching economic indicators and market sentiment closely. How these three factors interact with one another might very well determine gold’s direction in the days ahead. This shift highlights the need for thoughtful analysis and understanding of the market geology to those actively trading or investing in gold.