Gold Correction: Middle East safe-haven demand declining
This morning, gold prices fell, reflecting lower safe-haven demand, following the easing of geopolitical tensions in the Middle East. Israel's decision not to attack key infrastructure in Iran over the weekend reduced fears of further escalation in the conflict, diverting investors into assets such as the dollar. Despite threats of retaliation from Iran, the impact on the market has been limited. Nevertheless, gold remains near its highs, given the backdrop of global risks and concerns about economic growth. Other precious metals have also recorded declines this morning. Platinum has fallen by 0.8% and silver by 1%, both affected by the strength of the dollar. Copper, meanwhile, is down 0.6%, in response to signs of an economic slowdown in China, which is affecting demand for industrial metals.
Spot gold traded down -0.7% at $2,729.65 per ounce, while December futures fell -0.5%. In addition, political uncertainty, particularly around the U.S. presidential election, has generated more interest in the dollar, which continues to strengthen. Gold is currently well above the last and third control zone of $2,645.60 of the triple bell. The RSI is at 66.74% and we see that this morning's volumes have been purely bearish, which could indicate that gold could make a correction towards $2,700. If this happens it would be testing the middle zone of the bullish channel initiated on February 15th. The latest upward momentum seems to have generated the expectation of an upward advance to the $2,850 area, where it is possible that it will correct its price to the current all-time highs at $2,758.32.
In summary, gold and other precious metals face pressure this morning due to easing geopolitical tensions and a strengthening dollar, although global uncertainty remains a key factor.
Ion Jauregui - ActivTrades Analyst
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Spot gold traded down -0.7% at $2,729.65 per ounce, while December futures fell -0.5%. In addition, political uncertainty, particularly around the U.S. presidential election, has generated more interest in the dollar, which continues to strengthen. Gold is currently well above the last and third control zone of $2,645.60 of the triple bell. The RSI is at 66.74% and we see that this morning's volumes have been purely bearish, which could indicate that gold could make a correction towards $2,700. If this happens it would be testing the middle zone of the bullish channel initiated on February 15th. The latest upward momentum seems to have generated the expectation of an upward advance to the $2,850 area, where it is possible that it will correct its price to the current all-time highs at $2,758.32.
In summary, gold and other precious metals face pressure this morning due to easing geopolitical tensions and a strengthening dollar, although global uncertainty remains a key factor.
Ion Jauregui - ActivTrades Analyst
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
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