On Wednesday, gold prices reached a one-month high. This happened amid the growing concerns about the escalation of the conflict in the Middle East. Recent events in the Gaza Strip led to an increase in demand for safe haven assets.
The gold price was supported by a number of factors. Among them are geopolitical risks and the possibility of stagflation due to high oil prices. This was reported by Kelvin Wong, senior market analyst for Asia Pacific at OANDA.
IG Strategist Yeap Jun Rong agrees with this opinion. According to him, the interest in safe haven assets amid geopolitical tensions in the Middle East remains the main driver of the gold price growth. Nevertheless, the mark of $1945 may be an important level of resistance, which should be overcome, says the analyst
The gold price growth is noted from the very beginning of the escalation of the conflict in the Middle East. However, in recent sessions, demand for it decreased, especially amid the renewed concerns about the interest rate hike in the United States.
The latest US retail sales data has increased the concerns about the sustainability of inflation. This could force the Federal Reserve to take a more hawkish stance.
Investors are now awaiting comments from US Federal Reserve officials, especially its chairman Jerome Powell. The speeches will take place later this week. As expected, the head of the central bank will provide information regarding the future course of monetary policy.
The gold price has exceeded the level of the downward corrective trend on the D1 timeframe.
In terms of wave analysis, the price is in forming the first ascending wave on the H4 timeframe. The Relative Strength Index (RSI) indicator (standard values) signals a change in direction and a transition to the second downward wave, which is reflected in the divergence. Nevertheless, the strong news background of the current week gives more confidence to the bulls. According to fundamental analysis, the potential for growth is increasing.
Signal:
The short-term outlook for GOLD is to buy.
The target is at the level of 2000.00.
Part of the profit should be fixed near the level of 1950.00.
A Stop-loss should be placed near the level of 1850.00.
The bullish trend is of a short-term nature, so it is suggested to limit the trading volume to no more than 2% of your capital.
This content is for informational purposes only and is not intended to be investing advice.
