Gold Loses Value Amidst a Reopening of Major Cities Around the World
- The price of Gold lost more than 4% of its value in the last 10 days
- Major countries are preparing for a reopen their economy
- XAU/USD could not break the 1675 level despite a bearish sentiment
After reaching a 12-year high in mid-April, Gold started to move downward by breaking the 100 SMA (Simple Moving Average).
The yellow metal could not break the monthly support (blue line), which explains the slight rebound around this level.
The Gold might flirt with the monthly support (1675) for a few days before deciding which direction will take.
If it breaks the white trendline and closes above it, we could see the yellow metal reaching the 1729 mark.
However, a break below the $1675 level, a big move downward will be seen towards the $1645 as a price.
As you know in times of crisis, investors rush to buy Gold, but since the major cities declared that they would reopen in May, this has left investors with positive sentiment.
Oklahoma, Georgia, and Alaska declared a loosening of their lockdown restrictions on businesses although public health analysts warned against such decisions.
In Spain today, the government will allow its citizens to go out for exercise for specific periods of the day.
Another positive news that may have pushed the investors to withdraw their capital from the gold market is that Gilead Science achieved positive trials using its new vaccine “remdesivir”.
An act that could lead the Gold to fly is if the president Trump carries through on with his threats to impose tariffs on China since he considers China is responsible for the pandemic spread.
Asked whether he would consider having the United States stop payment of its debt obligations as a way to punish Beijing, Trump said:
“Well, I can do it differently. I can do the same thing, but even for more money, just by putting on tariffs. So, I don’t have to do that.”