Gold soars through $1,350
Gold hasn’t hesitated to capitalize on the risk averse markets, soaring through $1,350 today to hit a 14-month high.
The yellow metal has run straight into resistance again though around $1,360, which coincides with the peaks we saw throughout 2017 and 2018. Even above here we could see further resistance around $1,370, around the 2016 peak. Above here though, we could see gold gather further momentum.
Gold Daily Chart
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I’m not convinced the risk aversion will hold though so this may rely on the dollar coming under further pressure, which wouldn’t come as a surprise after it fell to its lowest level since March last week. We’ve seen a recovery since then but that already looks to be running out of steam, which could see its resolve tested.
The dollar index below shows the greenback testing prior support from below and struggling to break back above.
US Dollar Index
Source – Thomson Reuters Eikon
As the day has progressed, gold has pulled back from its highs and is now testing prior resistance from above. If we can close the week above here, it could be viewed as a very bullish signal and help get next week off to a strong start.
Gold 4-Hour Chart
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Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years’ experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.
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