Gold Rally-Time to Sell?

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No doubt gold has witnessed a strong rise and demand in the past few weeks.  Bulls were riding the move from past few weeks or if I say from last 2-3 months that will also correct. Although consolidation and corrections came in between, but it was very bullish. Yesterday also Gold gave a smart upside move and touched and now crossed 5 years high on MCX. What factors supporting the Gold price? Here I would like to discuss some points which are supporting Gold price. Later I will discuss also on technical view.

1. As we know that Dollar and Gold price are closely related, means if the dollar raises gold generally falls and vice versa. I am writing in the loose term ‘generally’ because trend and fundamentals mainly drive the commodity price.

The dollar index is near its resistance and yesterday it has fallen and consequently gold and silver price rose sharply. Analysts say the dollar is now in correction phase and may cool down. A lot of factors also signaling this, like Fed dovish statement about a further interest rate hike in the near future. Recession fears in America, shut-down, Brexit and many others. These all factors supporting Gold price rally.

MCX Gold Chart

2. On MCX if we closely watch Gold price, it is trading near or above 5 years high while on COMEX it not crossed or touched that high. This is because our currency is weaker than that time it was. If the dollar falls, Gold will get support. When the dollar falls our Rupee strengthen somehow but not that much in percentage wise. This also tends to price sustain at this level.

Dollar Index Daily Chart

3. We also know that demand is the main factor which derives any commodity price. No, doubt Gold has witnessed strong demand in the past few weeks. Wedding season in India, when mostly gold demand is on peaks also support price rise in gold. Some countries buying Gold as their asset reserve.

US Gold Future Chart

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4. Will this rally continue? Gold shine is not going to dim soon. But the last buyer/investor has more room to lose big and profit less. So, at this level, I can’t suggest anyone to jump in this rally.  Be a smart investor and try to invest at the lower price and sell at higher price and decide your trade wisely after looking at all corners.

Disclaimer: This article is for information purpose and does not read it as any trading advice or investment suggestion. I and my website (RK-Commodity) will not be responsible for any loss or gain in any manner for your trade or investment.