Gold Bulls Eye $1500

Fiona Cincotta August 7, 2019 11:20 AM

Gold soars as traders seek out safe havens

Gold is on the rise again benefiting from its safe haven status as traders fret over the health of the global economy, amid spiraling trade tensions.  

 A trio of central banks across Asia Pacific delivered surprise interest rate decisions overnight. Both New Zealand and India cut rates deeper than forecast whilst Thailand’s rate cut was almost completely unexpected. We are seeing policy makers act more aggressively than the market was counting on, in a bid to bolster their economies.  

As the US – Sino trade war continues to escalate, central banks are growing increasingly concerned over the impact on their economies and more broadly, the global economy. With PBOC once again allowing its currency to set close to the key 7/dollar level, China continues to demonstrate it means business. There are no signs of US – Sino tensions easing anytime soon.

If traders needed further evidence of the slowing global economy, they only needed to look towards German industrial production figures. As if on cue and adding to traders’ woes, data from Germany showed that industrial production dropped -1.5% month on month in June, significantly worse than the -0.5% decline forecast. 
A trio of banks cutting in addition to warning signs flashing from the German economy has left investors jittery and in search of safe havens once again.

Gold continues to rally for a third straight session, jumping to fresh multi-year highs of $1491 in early trade.  Bulls are focusing their attention on the psychological level of $1500. However, we could see the rally pause for breath now as traders look to book profits amid extremely overbought conditions. Attention will turn to Chicago Fed President Evans this afternoon for short term trading opportunities.


TAGS:

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account