The dollar rebounded and gold retreated after reaching a record high

The recentmovements of the gold price were basicallydriven by market sentiment.After breaking above1, 900 USD from the end of August, market has been waiting for the price of 2,000. Coupled with the lack of obvious bearishfactors, gold tends to be easy to rise, but difficult to fall. Last Tuesday, the highest spot price rose to a new high of 1,921. The resistanceencounteredduring the movement was small, so the buying orders could easily push gold to a high price. After reaching a record highon Tuesday, gold fell slightly. When the dollarstrengthened, gold closed slightly lower, bringing a downwardadjustment on Wednesday. It fell from the high price 1,880 to 1,791with one-day decline of nearly90. It has rebounded to 1.870.50on Thursday, but the breaking momentumwas not sufficient. It was slightly up on Friday, but in the end due to the stronger dollar,gold finallyclosed at 1,858.on Friday.

The dollar rebounded significantly last week. The euro against the dollar continued the downward movement, with high level of 1.4290 on Tuesday. After that the dollar slipped every day, falling to 1.3630 on Friday. The dollar surged sharply against the hedging currency,Swiss franc, jumping from78.40to 86.30, an increase of almost 800 point. From the recent U.S. economic data andperformance, the U.S. economy does not pick up,but because of the worse capital marketexpectation in Europe, capital flew into the dollar. Swiss franc had been supported by capital inflows, but the Swiss central bank had to stop theSwiss franc continuing to rise. After a series of measures, investors closed the long position ofthe Swiss franc, and also sold it off due to fall of euro. In short-term, the dollar exchange rate in the foreign exchange marketcanbe stabilized and rise. However, can the strong dollar stop the test of gold reaching the target of 2,000.It is difficult to determine.

Observed from the chart, the price of gold did not form a new trend. On the chart there was only support of 1,780 could be measured, and only a target in the upward movement, but no resistance. The volatility this week is estimated at 1,780 to 1,920. As thedollarstrengthened, gold may not have high price in this week. But we should note that the recent trading volume of the gold market have increased significantly, showing the trading interests and emotions are high, which are more conducive to the rise of gold.
Silver is still underperforming the gold, and the high price was only at 43.35, not breaking the high levellast week. This week’s trend will follow the gold,but is still behind it. The volatility is estimated at 40 to 43.50.