Market News & Analysis


Top Story

Gold Back Over Trend Line Support, More Upside To Come?

Gold is trading over 0.9% higher and has pushed overt the $1600 mark, as it attempts to pare some of Friday’s losses. 

Safe haven
Gold has had an interesting reaction to coronavirus. The price of gold trended steadily higher as coronavirus fears increased flows into safe haven assets. Gold advanced in every trading session par 5 across the month of February. Friday was one of those losing sessions. On Friday, despite coronavirus risks remaining high, gold sold off sharply in a serious bout of profit taking. The price slipped through trend line support, testing the 50 sma before rebounding. 

Easing monetary policy
Gold is once again climbing higher after the Federal Reserve hinted that it could ease policy in a bid to shore up the US economy in the face of risks posed by the coronavirus outbreak. The BoE and BoJ alluded to the same, whilst the group of 7 finance ministers (G7) said they would use all appropriate policy tools.
The prospect of the Fed and its peers easing monetary policy is music to the ears of gold bugs. In a lower interest rate environment, the opportunity cost of holding non -yielding gold declines, boosting demand for the precious metal.

Level to watch
Gold is trading 0.9% higher, crucially pushing back over the ascending trendline which began last December. A close above the said trend line could initiate another push higher. 
Immediate resistance can be seen at $1605 (today’s high) a breakthrough here could open the door to $1611 (yesterday’s high) prior to $1650 (Friday’s high).
Immediate support is at $1595 (trend line) prior to $1575 (yesterday’s low) and $1569 (50 sma).

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.