What's Happening With Gold?
Gold continues recording new high despite monthly RSI reading of 89-90 signalling extremely overbought conditions and casual pullbacks are attracting buyers on any dip towards value areas resuming higher high and higher low structure which is precisely bullish.
Disappointing ADP numbers keep dollar under pressure and Gold gets substantial support as bond yields remain neutral or dull.
Recent record high of $3895 witnessed a minor pullback to $3852 which was quickly absorbed by buyers retesting $3893 today and prices stand at striking distance of record high.
What's Driving the Bullish Rally?
Fundamental Drivers:
The US government shutdown and fiscal stress has caused global concerns triggering increased bets for risk off sentiments driving investors for higher Gold prices on safe haven buying.
Continued Dollar Weakness below critical resistance 98 is supportive for dollar denominated Gold reducing opportunity cost of holding the non yielding asset.
Sticky Inflation makes Gold a preferred hedge against inflation as store of value.
Geo political concerns across Europe, mid east keep safe haven demand strong and boost Gold prices further.
Robust buying by major Central Banks create further structural demand for Gold as several central banks continue increasing Gold in reserve than dollar and no central bank selling Gold despite record high prices.
Any surprise hawkish message from the Fed members or strong economic data can cause a pullback in Gold prices while any dovish tone by Fed will further boost Gold prices.
Technical Drivers:
Technical structure is still bullish favouring further continuation supported by price stability above immediate support $3852 and moving within a strong ascending bullish parallel channel as seen on the 4 hourly chart while further bullish extension requires strong break and stability above immediate resistance $3898 which targets next leg higher $3914 followed by $3934
Overbought conditions on Monthly RSI reading 89-90 urges caution on heights as break below crucial support may trigger profit booking pressure, especially if some news about potential agreement on US shutdown strengthens dollar and treasury yields.
If Gold breaks below $3872, expect a retest of $3860-$3858 while break below $3852 will expose $3845 followed by $3830-$3820
Gold continues recording new high despite monthly RSI reading of 89-90 signalling extremely overbought conditions and casual pullbacks are attracting buyers on any dip towards value areas resuming higher high and higher low structure which is precisely bullish.
Disappointing ADP numbers keep dollar under pressure and Gold gets substantial support as bond yields remain neutral or dull.
Recent record high of $3895 witnessed a minor pullback to $3852 which was quickly absorbed by buyers retesting $3893 today and prices stand at striking distance of record high.
What's Driving the Bullish Rally?
Fundamental Drivers:
The US government shutdown and fiscal stress has caused global concerns triggering increased bets for risk off sentiments driving investors for higher Gold prices on safe haven buying.
Continued Dollar Weakness below critical resistance 98 is supportive for dollar denominated Gold reducing opportunity cost of holding the non yielding asset.
Sticky Inflation makes Gold a preferred hedge against inflation as store of value.
Geo political concerns across Europe, mid east keep safe haven demand strong and boost Gold prices further.
Robust buying by major Central Banks create further structural demand for Gold as several central banks continue increasing Gold in reserve than dollar and no central bank selling Gold despite record high prices.
Any surprise hawkish message from the Fed members or strong economic data can cause a pullback in Gold prices while any dovish tone by Fed will further boost Gold prices.
Technical Drivers:
Technical structure is still bullish favouring further continuation supported by price stability above immediate support $3852 and moving within a strong ascending bullish parallel channel as seen on the 4 hourly chart while further bullish extension requires strong break and stability above immediate resistance $3898 which targets next leg higher $3914 followed by $3934
Overbought conditions on Monthly RSI reading 89-90 urges caution on heights as break below crucial support may trigger profit booking pressure, especially if some news about potential agreement on US shutdown strengthens dollar and treasury yields.
If Gold breaks below $3872, expect a retest of $3860-$3858 while break below $3852 will expose $3845 followed by $3830-$3820
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.