Gold shines amid dour risk mood in markets yesterday
The gold train continues to march on as fundamental factors keep falling into place for the commodity to make a run higher.
The situation in Argentina and Hong Kong aren’t really helping with the risk mood and that is giving added conviction for gold buyers to push price higher to start the new week.
For me, the only thing gold buyers need to do this week is to keep price above $1,500 and I’d consider that a win in terms of building towards the next move higher.
Because if you look at the chart, there really isn’t much stopping gold from a potential move towards $1,600. More so when you consider the global backdrop of rising trade tensions between US and China (not to forget, a slowing global economy as well) and central banks everywhere easing monetary policy.
Sure, if you want to be nit-picky, there is some minor resistance seen closer to $1,535 and $1,562 but I wouldn’t peg those as big/key levels to watch out for.
As mentioned at the end of last week, we’ll eventually see some form of retracement or profit taking down the road but I just don’t see it lasting the course considering the global outlook as highlighted above.
I reckon perhaps if US and China can feed some optimism back into markets, then we could see the run up in gold take a breather.
But much like it has done all the time, expect the US-China trade rhetoric to disappoint investors and that will play into gold’s hands in the big picture.