FxWirePro: Gold tests key trend changing level

Since the French election round one, where the pro-EU candidate Emmanuel Macron came in the first place and closer to becoming the President of France, gold has suffered a major blow as the demand for safe haven assets dwindled. The easing of tensions between Russia and the United States with regard to the latter’s missile attacks on Syria has also contributed to the decline. The yellow metal, which was trading around $1285 per troy ounce on the eve of the French election has now declined to $1236 per troy ounce.

Yesterday, the gold price was hovering around $1250 area before it received a final blow from the FOMC. While the Federal Reserve kept the interest rate unchanged at yesterday’s meeting, the statement was much more hawkish than anticipated which pushed up the yields and the dollar, while gold declined.

Gold is now testing a very key short-term trend changing level which is around $1230 area.

We at FxWirePro expect some buying around these levels based on the long-term outlook for gold, which is positive. We suspect the gold price to reach $1395 area.