Safe-Haven Demand Surges Higher
Gold prices continue to push higher on Tuesday as safe-haven inflows and fresh Chinese central bank demand keeping prices underpinned. I wrote recently how gold has settled into a make-or-break structure over recent months. Given the upside momentum we’re seeing here, risks now appear skewed to a break above the late November highs and a resumption of the bull trend towards 2024 highs and beyond.
Global Risks Intensifying
Rising geo-political tensions linked to the toppling of the Assad regime in Syria have given investors fresh cause for concern this week. With global political leaders scrambling to get a read on the situation, risks of further violence are seen with both Israeli and US military strikes on Syrian rebels threatening to create further instability. Given the heavy conflict already underway in the Middle East, the situation is highly dangerous and gold prices look vulnerable to further upside on any incoming headlines.
Chinese Buying Resumes
Away from safe-haven flows, gold prices are also being supported this week by news that the Chinese central bank has resumed gold bullion purchases. Following a six-month hiatus, the buying is linked to expected forthcoming Chinese stimulus and also as a means for the country to reduce its US treasuries exposure.
US Inflation on Watch
Looking ahead this week, traders will be watching the latest US inflation data due tomorrow. If we see any downside surprises, this should cement December Fed rate-cut expectations, driving USD down lower while pushing gold higher.
Technical Views
Gold
Gold prices are once again looking to break back above the 2,684.76 level. With momentum studies turning higher again, focus is on a move back to YTD highs if bulls can breach current resistance. To the downside, 2,530.59 will be the key support to watch if we drop below 2,604.56.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.