Gold surged sharply last night, returning to the $4,200/ounce zone and is expected to continue its strong upward momentum.
The main driver behind this surge comes from news that FED’s Bostic will soon retire, and as long as Donald Trump remains in office, he could nominate a loyal and close ally to take over the position — posing a threat to the FED’s independence.
Additionally, the U.S. government’s plan to reopen has raised investors’ expectations that the FED will continue to cut interest rates in December to support the weakening U.S. economy.
As a result, safe-haven sentiment has returned, strongly supporting gold prices — and the momentum is likely to strengthen further.
When the U.S. government reopens and economic data fails to show significant optimism, gold prices may be pushed toward the previous peak at 4,38x or even break above to establish new highs in the 4,400 – 4,500$/ounce range.
Technical Analysis:
Gold has broken through the strong resistance zone at 4,15x and is now trading around the $4,200/ounce level.
The current uptrend remains solid. However, in the short term, a strong correction toward the 4,15x – 4,16x area (following the 0.5 – 0.618 Fibonacci retracement) may occur before rebounding back to the 42xx region or even retesting the previous peak at 4,38x.
Leave a Reply