The gold price jumped to a new 7-year-high, well above $1,600, driven by traders’ impulsive reaction amid the increasing risk of a war between Iran and the US. Bullion’s rally is confirming the huge appetite for safe havens in the current scenario, with investors moving liquidity from stocks and other risk-on assets to gold.
The recovery in the last 24 hours is also confirming – as we anticipated in yesterday’s note – that the correction seen earlier this week (closing the gap up between $1,550 and $1,565) was only a consolidation movement rather than an inversion, as traders are still betting on further gains for gold.
From a technical point of view, the previous resistance at $1,587, which is the high achieved earlier this week, becomes a key support level and as long as the price remains above it, the outlook remains positive for gold.
Chief analyst at ActivTrades and technical analyst for Italian newspaper 'La Stampa'. Carlo Alberto provides regular commentary for UK outlets including the BBC, Telegraph, the Independent Bloomberg & Reuters. He is also a weekly commentator for CNBC Italy and a columnist for La Stampa. He worked for Bloomberg as their Equity Research Fundamental Analyst before joining brokerage ActivTrades in 2011 to specialize in currency markets and commodities. In 2014 he published a 250-pages book on gold and the gold market, followed in 2018 by a new updated edition.
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© 2019 High Leverage FX - All Rights Reserved.