Over the last month gold has made a strong recovery. After briefly surrendering its position as the most valuable metal to palladium just last week it has rebounded and is once again the most expensive metal. Following a YTD low of $1167 in mid-August, the price of metal has increased by 7%. In this same time period U.S. markets have taken significant blows. It appears that many investors are seeing gold as a more valuable store of value than the stock market or the dollar at this time. Factors such as trade tensions, uncertainty regarding future rate hikes, and volatility in the markets have frightened investors.
In this chart, we can see gold’s resurgence since mid-August. However, due to the high RSI of 65 I anticipate that we will see a slight sell-off coming later this week. I expect that a small sell-off will be followed by more upward movement that could last until March 1. I say March 1 as this is the deadline for a trade deal with China. Until trade tensions with China are tempered, volatility in markets will persist and gold will be seen as a safer avenue for investment. December and early 2019 will present positive upward momentum for gold as it will remain the most valuable metal on Earth and be a reliable option for risk averse investors.