The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Over the course of the week gold has fallen away by $50. There might be a temptation just ahead of the weekend to square-off positions, especially with the possibility of situations arising to destabilise the current calm global outlook.
The last couple of weeks have now seen over $100 taken out of the gold price and around half the gains for the year lost. Looking at the 10-day relative strength index, it is now indicating that the precious metal is in oversold territory and that could attract bargain-hunters back onto the scene.
The US Federal Reserve has brought a potential timeline for raising interest rates back into the equation. This has highlighted gold’s Achilles heel of being unable to generate an income. A short period below the $1300 level could be interpreted as support being tested however, and a sustained period below could be the trigger for greater losses.