It has not been a good start to the week for gold and silver. Precious metals prices are falling across the board, and risk going even lower. Citibank analysts are still bullish, but they don’t exclude a deeper correction either.
Where is Gold Headed?
After roughly two weeks of sideways trading, there is no real improvement in sight for precious metal markets. Rather than mounting a small comeback, the trend is heading in the completely opposite direction. Not the momentum traders and investors are looking for by any means.
Figuring out where this negative sentiment is coming from, remains a guessing game. Some point at a stronger dollar, but that only tells part of the story. The ongoing discounts in India and China confirm the overall demand for bullion remains relatively weak.
Even the Citibank analysts are not too sure where things are heading. Despite an ongoing bullish outlook, there is a change that XAU/USD will test $1,850 per ounce. Not the biggest setback the market can face, but still a key point of focus for everyone.
Looking beyond the immediate future. Citibank analysts remain bullish between now and the end of 2020. A price of $2,200 per ounce by late December remains possible, in their opinion. Looking back at the price chart, this is not a lofty target either.
It is impossible to predict what happens between now and three months from today. Anything can happen in the financial sector. Whether this will be beneficial to precious metals, is a very different matter altogether.
Citibank : Correcting Deeper Remains Possible
Based on the current gold price, there is a good chance a deeper correction will kick in. More specifically, it all comes down to where the market is headed later this week. Testing the lower levels will drive the moving average below a 55-day trend, which is somewhat problematic.
That being said, technical indicators can only serve so much purpose. They offer insights into any market, but there is always a lot more going on than meets the eye. Gold has ample support from investors who will try to keep it above $1,900, but it remains to be seen if those efforts can be successful.