Gold: a time for profit taking?

The price of gold added 1.8% to its value during the previous week. There are generally two major reasons for such a move. On one side were, for one more time, increased geopolitical tensions in the Middle East, while on the other side were surprisingly lower jobs figures in the US, below market expectations, which pushed the US Dollar to the lower grounds. The price of gold started the previous week around the level of $2.370, and moved to the higher grounds, reaching the highest weekly level at Friday`s trading session at $2.476. Still, during the last two days of the week, the profit taking among investors impacted the price of gold to close the week at the level of $2.443.

During the previous period the RSI was indicating that the market is slowly gearing up for a move toward the oversold market side, however, this path was stopped during the previous week, when the RSI indicator reverted to the level of 60. It shows that the oversold market side would have to wait for a bit more time. Still, moving averages of 50 and 200 days continue to move as two parallel lines with the uptrend, indicating that there is no cross in store in the coming period, and in line with it, a potential for a trend change.

Current charts are indicating that the price of gold is struggling to make a clear move toward the new all-time highest level, above the $2.480. In this sense, some further short reversal should be expected in the coming period. Of course, it should always be considered that any new negative news from geopolitics would have a short term effect on the price of gold. However, under “normal” circumstances it could be expected for the price of gold to relax a bit within a week ahead. There is potential that the price will revert back around the 2.4K levels.