Gold is up by 1% on the day
The technical signs are starting to look in favour of gold once again. Last week, price managed to break above the late August high of $1,214.35 and now we’re on the way to breaking above the 100-day MA (red line) @ $1,228.26. Should buyers succeed and hold a break above that, it bodes well for a move higher in the days to come.
Looking at the chart, hold a break above that and more importantly the support-turned-resistance level from the December 2017 low @ $1,236.55 and the coast is very much clear for a run towards the 200-day MA (blue line) next.
The biggest surprise in all of this is the timing of gold’s appreciation. For the longest of time this year, the precious metal isn’t even considered to be a safe haven and has been more of a dollar trade more than anything else.
However, with correlations breaking down all over the place since last week, the dollar’s loss of appeal as a safe haven has been a key game changer for gold. This basically highlights that:
Since the start of the year, gold has been tied to the dollar’s performance in general but of late there has been a significant divergence. With markets still feeling jittery and gold looking to make a comeback as a haven asset, the fundamental (and technical) picture is starting to look better for gold now.