The Present Condition of Gold


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The binary options on Gold fell to its lowest level since two years earlier in the morning. The price of the precious hit a low of $1385 an ounce after the Chinese Gross Domestic Product data disappointed. The GDP of the second largest economy in the world fell to 7.7 percent in the first quarter of the year below expected 8 percent level. The percentage for the previous quarter was 7.9 percent. The price of yellow metal dramatically dropped on fears about central bank sales and holdings on global exchange-traded funds sank to their lowest in more than a year. The investors that have long positions in the yellow metal are also concerned that U.S. Federal Reserve would soon end its bond buying program. The central bank currently is purchasing government bonds for $85 billon every single month. The U.S. economy also is posting a recovery from the crisis in the last several months. Some analysts of the metal said that the price movement below $1500 is not a good sign for the commodity and they are not sure where to project the new support.
The futures in United States for June delivery fell more than 5 percent while the Tokyo gold futures tumbled around 8 percent. The Japanese futures made its biggest daily rally since September 2011. One of the factors that are also weighing on the gold’s price is Cyprus’ plan to sell gold reserves to raise around 400 million euros. In technical point of view, the trend is strongly bearish after the clear break below the major support at $1525 level. The trading of binary options on gold is currently available around $1410 an ounce, but some reversal could be seen as the Relative Strength indicator is in oversold zone. A cross of the 30 level would be sign of the upside move. First resistance on upside could be projected around $1458 and price movement through it would trigger further rise towards psychological $1500 mark. On downside first support could be projected around $1380 and a price movement below it would trigger new wave on downside towards $1225.
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