Market Analysis

Gold price going up

After pausing for a few months, investors’ appetite for bullion recovered momentum and the gold price skyrocketed in the last few days of 2019, jumping well above the psychological threshold of $1,500. The price is now facing the resistance area of $1,520, while the next target is placed at $1,550-$1,555, which was September’s peak and also the highest level reached in the last six and a half years.


Gold Chart | Source: ActivTrader

The reasons for this impulsive rally are not immediately obvious, however there are few nonetheless. First of all, we have graphical grounds for this rebound as the price left behind the low volatility compression band that held prices between $1,450 and 1,480 for almost two months, giving a clear directional signal. Moreover, traditionally the first part of the year has often provided positive seasonality for gold. Now it seems that investors are trying to anticipate this movement and it has now moved into the final part of the year. The slowing down of the greenback is another positive element for gold as the dollar is negatively correlated with bullion. All these reasons help explain bullion’s rally of bullion, particularly in a scenario where investors’ interest is lifted by central banks’ record appetite for gold.

Carlo Alberto De Casa – Chief analyst, ActivTrades


*The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication. All information has been prepared by ActivTrades PLC (“AT”). The information does not contain a record of AT’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of futures performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.