Gold Technical Analysis: As Global Tensions Ease, Gold Could Go Lower
Gold is one of the most important commodities in the world. While it lacks any significant industrial uses, it has become an important investment for investors and governments.
Investors and governments hold gold as a hedge against disaster. They believe that if the world was to be faced with a major disaster, the role of gold will be very important.
The historical significance of gold can be traced to all ancient books and manuscripts.
On gold, things have changed. In the past, it was not uncommon for people walking in their farms to find gold deposits. In the last century, improvement in technology and the demand for gold made the mining process easier. This has led to the decline in the amount of gold mined. Mining companies have even slashed their capital investments in gold.
The relationship between gold and the dollar has been written about for decades. The theory is that the price of gold tends to go up when the value of the dollar goes down. The evidence of this can be seen this year. As shown below, YTD, gold has moved up by 1.73% while the dollar has fallen by a similar percentage.
This month, gold has moved up and down, reaching a monthly low of $1320 and a monthly high of $1365. It is now trading at $1325. In the short term, there is a likelihood that gold will continue moving down as the tensions in Syria and North Korea subside and as the US takes measures to prevent a trade war.
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