Gold: correlated with USD

The beginning of the new year brought some higher volatility of the US Dollar, while the price of gold followed market movements. The price of gold started the previous week from its lowest level at 2.6K and moved toward the level of $2.663, while it slipped on Friday, ending the week at $2.639. Analysts are noting that the price of gold is affected by the strong demand for US Dollar, especially taking into consideration investors expectations that the potential tariffs, which would be imposed by the new US Government, might impact persistent inflation and limit the Fed in cutting further interest rates.

The RSI is currently moving around the level of 50, implying that the market is still not ready to take a clear path toward the overbought market side. The moving average of 50 days continues to modestly converge toward the MA200, however, there is a long distance between two lines, in which sense, the potential cross is still not in store.

Current charts are showing some potential for the price of gold to remain under pressure, in the short term. In this sense, there is some probability for the price of gold to test the $2,6K support line for one more time. At this moment, there is no indication that this level could be clearly breached. On the opposite side, currently, there is no space for higher grounds above the $2,680.