Gold’s RSI Level Drops below 30—What’s Next?



Low RSI level for gold

As we see fresh six-month lows for gold, some technical indicators are pointing toward a possible revival in its price. The RSI (relative strength index) for gold was 25. An RSI level below 30 indicates that the asset may be oversold and could see a possible revival in price.

Despite the massive pressure on gold prices, ongoing trade war concerns could lift gold’s price. Gold has dropped ~3.8% over the last month. This negative sentiment has extended to the other three precious metals. Silver, platinum, and palladium have declined 2.9%, 6.2%, and 4.4%, respectively, in the last month.

On Thursday, June 28, silver fell 0.3% and was trading at $16.00. Platinum dropped 1.0% and traded at $850.00, and palladium fell 0.48% and traded at $945.70 per ounce.

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Indicators of gold’s movement

Raphael Bostic, the president and CEO of the Federal Reserve Bank of Atlanta, said on June 28 that although the Fed was concerned about the overheated economy, it also acknowledged that the expansion has been steady. In the next article, we’ll look at the comparative performance of gold versus interest rates.

Gold has been highly reactive to movement in the US dollar, which has a negative impact on the price of precious metals. Dollar-denominated assets rise with a fall in the dollar and vice versa.

Among the mining companies that dropped on June 28, First Majestic Silver (AG), Alamos Gold (AGI), Royal Gold (RGLD), and Goldcorp (GG) fell 2.1%, 0.89%, 0.73%, and 1.1%, respectively.

Among the gold- and silver-based funds that have declined over the last month, the SPDR Gold Shares ETF (GLD) and the iShares Silver Trust ETF (SLV) have fallen 4.0% and 2.5%, respectively, on a 30-day trailing basis.


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