The price of gold fell today, Wednesday, for the first time in 8 days, due to the process of correcting and taking profits, after prices recorded yesterday the highest level in two months, and the decline in the price of gold also increases the rise of the US dollar against a basket of currencies.
The price of gold ended yesterday’s trading at a rise of 1.1%, in the seventh consecutive daily gain, within the longest series of daily gains since February 2016, to record the highest level in two months at $1218.66 per ounce, in light of the continued purchases of gold as a haven A safe investment for concerns about the economic policy of Donald Trump, the new US president, in addition to the US dollar's decline against a basket of currencies.
The US dollar index rose by 0.4%, to compensate for part of its sharp losses recorded yesterday, due to the rebound process from the lowest level in six weeks at 100.24 points, which puts negative pressure on gold prices as it is denominated in US dollars and its cost increases to holders of other currencies.
The rise of the US dollar comes ahead of the release of important data from the United States represented in the inflation rate and industrial production during the month of December. Positive data will support the continued recovery of the dollar against most currencies.
Investors are awaiting by 20:00 GMT the speech of Federal Reserve Chair Janet Yellen at the Commonwealth Club in San Francisco, and it is expected that she will talk about the future of monetary policies and interest rates during the current year 2017, in light of the recent developments in the US economy, and with the approach of taking office. Donald Trump is the president of the United States.
Technical analysis of the gold price
The price of gold is trading at the level of 1204.73, where the price rebounded towards the bearish trend after the price failed to breach the resistance level in conjunction with the presence of the Fibo line 38 on the daily time frame.
Trading is now taking place above the level of the average moving indicator line, while both the stochastic indicator and the MACD indicator are showing a negative crossover on the daily time frame.
Therefore, the price is expected to continue declining to target the level of 1191.40 until the end of the week