Gold Facing Stiff Test in the Short-Term

Gold has been sold early this week as risk sentiment among global investors has turned optimistic in the equity markets. Short-term selling pressure in Gold may prevail if the major stock Indexes continue to see buying momentum.

Headwinds Hammering Gold in Short-Term

Gold has faced a stiff test the past few trading sessions. After attaining highs last week, the precious metal has faced headwinds as risk sentiment has shifted and become more optimistic.

Gold is trading near 1325.00 U.S Dollars an ounce and the commodity’s strong gains made the past three weeks are being tested.

Speculative Buyers Eroding

Speculative buying sentiment among gold traders has eroded as global equities have reversed higher this week. Gold may continue to find support around 1320.00 U.S Dollars an ounce, but its dance should be watched intently.

The fact that the U.S Dollar may remain vulnerable in the mid-term may help the precious metal find a foundation which allows it to maintain most of the gains it has made since early July, but traders looking to buy Gold should use risk management.

Gold Recent Surge Faces Challenge

A look at a long-term chart for Gold shows the precious metal has seen a massive surge upwards recently. Its gains may continue to be put to the test by traders who have the courage to sell Gold, due to the sudden shift into global equities.

In the short term, we believe Gold may be negative. Mid-term and Long-term we are unbiased.

Yaron Mazor is a senior analyst at SuperTraderTV.

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