Will Gold Lose its Shine this Autumn?

Gold faces another challenge this week as it dropped back towards its previous support level after the massive rise since July.

There is so much lurking in the background of gold’s story this year that it is difficult to make a certain judgment call at the moment.

The above gold chart shows that the metal currently is hovering around the 21-day moving average on the daily timeframe. Gold still trades above the psychologically important $1300 level which was a major resistance in June and The $1300 has since become a major support level.

Given the Chinese government announcement on bitcoin and in spite of its 30% rally in price, investors who piled into bitcoin could be forgiven for being nervous.

Bitcoin “players” are nervous as much as they have announced a move to the latest major BitKan Blockchain Global Summit conference, from Beijing, (where it was due to be held on September 10th) to Hong Kong, where it will now take place on Wednesday (20th September).

This shows the degree to which bitcoin is still fragile and open to government whims at the moment. Whether this has a longer-term effect on the crypto asset remains to be seen.

Physical gold is still in the doldrums. This could change now though, with investors changing their allegiance to gold coins rather than “bit” coins.

There is still no resolution in sight to the North Korean situation which could support gold demand in any case that political uncertainty will spark.

The dollar remains weak and seems to be in decline as a global reserve currency and commodities prices (which are priced in dollars) go up as the dollar devalues. The US stock market is still at all-time high although this is skewed according to which sector one looks at. Yet, as long as US interest rates stay low, the stock market and gold are expected to rise.

A small number of stocks in the NASDAQ index are the ones that pulling the index to new records. Without these stocks, it is possible that market weakness will be exposed which will lead to a collapse.

All of these factors support gold futures as a hedge against any scenario.

It may well be time to use the dip in gold prices to buy the precious metal before it rallies again and goes for new highs. However, the upcoming week can signal a lot to the next gold’s trend.

Noble Gold specializes in IRAs and 401(k) rollovers through precious metals and cryptocurrencies investments.