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Gold: “buy the dip” continues
Commodities
08/28/2018

Gold: “buy the dip” continues

Gold prices continue to recover on Tuesday, holding steady close to nearly two-week highs around $1,214.

Gold prices continue to recover on Tuesday, holding steady close to nearly two-week highs around $1,214. The greenback remains on the defensive, with the selling pressure has intensified in the wake of a trade deal between the US and Mexico.

Against the backdrop of a weaker dollar, which suffers a decline amid a risk-on sentiment, the bullion demand has surged over the past couple of weeks, and more signs of a reversal start to emerge. Late last week, the price has got back above the $1,200 hurdle which brought more buying interest for gold. For the current corrective rebound to continue, we need to see further decline in the USD index however.

Considering Trump is a wild card and the major news-marker for the global financial markets, the risk aversion could reemerge at any point. This means that the dollar demand may return suddenly down the road. Therefore, gold bulls should be careful as the yellow metal now looks more attractive for a partial profit-taking. In the short term however, the bullion could target the $1,216 area, but a sustained break above is unlikely any time soon.

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