Will the Gold continue its bearish wave??

 Will the Gold continue its bearish wave??


The Gold extended losses hitting its lowest level in near 4 months, and erased the gains which has achieved during first quarter of this year. The sharp decline of the Gold prices is due to some main political and economic factors.

1/ Eased tensions between Russia and Ukraine

The eased tensions between Russia and Ukraine tenured calm to the markets, especially after the victory of the Ukrainian billionaire Petro Poroshenko in the presidential elections last Sunday. Additionally, the Russian president Vladimir Putin has expressed his willingness to deal with him concerning the Ukraine issue.

2/ The improvement of the US economy

On Tuesday the U.S. economy witnessed the release of better than expected data which have pushed the U.S. dollar high against its major currencies and precious metals. These data have reinforced the improvement of the U.S. economic growth during the second quarter of this year, which will allow the Fed to implement constantly plans to reduce its bonds buying program.

3/ The decline of China demand for Gold
The yellow metal demand has decreased in China, the largest consumer of the Gold in the world. In fact,  China's gold imports from Hong Kong fall during the month of April to 64.5 tons, lower than the imports of the previous month which was of 86.0 tons.

4/ The increase of risk appetite:

The recent US economic figures showed that the world’s largest economy has maintained its recovery. And the investors risk appetite has also increased on the recover of the US equities, which hurt the safe haven appeal of the precious gold.

All the mentioned factors have contributed to the lower demand for the yellow metal, and the question that should be risen now is: “will the Gold continue is bearish wave, or bounce up again? “

MBCFX Forex & CFDs Brokerage Firm