After the XAU/USD gold price jumped towards the $1970 resistance level, it was exposed to profit-taking sales again. This pushed it towards the $1939 support level, before prices stabilized around the $1947 level at the time of writing the analysis. The strength of the US dollar stopped gold’s attempts to recover.
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Global physical-backed gold ETFs posted positive flows for the third consecutive month after adding 19 tons in May, taking collective holdings to 3,478 tons by the end of the month, the World Gold Council said in its latest report on Wednesday. However, total assets under management decreased slightly by 0.4% to $220 billion due to the lower price of gold in the month compared to April. However, the May move took gold ETF’s year-to-date flows into positive territory at $1 billion, which equates to a 6-ton increase in holdings.
The board added that the strong price momentum earlier in the month stimulated investors’ interest in gold exchange-traded funds, before it declined at the end of May with the decline in the gold price. In addition, the US debt ceiling negotiations and looming concerns about the banking sector may have prompted investors to seek safe haven assets, which contributed to the positive trend in May.
WGC data showed that almost all regions saw positive tonnage demand in May, with the exception of Europe. But money flows in Europe remained above zero due to the mechanisms of hedging products in the foreign exchange market in the region. North American gold ETFs have seen net inflows for three straight months, adding $1.4 billion in May. In addition to the aforementioned drivers, there may be a significant price recovery prior to the major gold options ETF’s expiration date, as significant outflows occurred that day.
- According to the performance on the daily chart below, the tendency of the XAU/USD gold price towards the support levels of 1935 and 1918 dollars is confirmation that the bears will start controlling the direction of gold.
- At the same time the prices will move towards new buying levels.
- The return of the gold price to the vicinity of the resistance levels of 1970 and 1985 dollars, respectively, will be important for the future of the psychological summit of 2000 dollars an ounce again.
The level of the US dollar, in addition to the increasing demand for the yellow metal as a safe haven in light of global geopolitical tensions, in addition to the future tightening of the policy of global central banks. I still prefer to buy gold from every downward level.
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