Gold glitters at 4,600 as traders flee to safety
|- Gold unlocks new all-time high on Fed independence fears and geopolitical tensions.
- Technical indicators favor the bulls as gold rises above 4,600.
Gold jumped to a historic high of 4,600 early on Monday as the U.S. Justice Department opened a criminal investigation into Fed Chair Jerome Powell, raising concerns over Fed’s independence ahead of January’s FOMC policy meeting. A potential U.S. strike on Iran amid ongoing violent protests in the country, along with Trump’s renewed threats to seize Denmark’s Greenland, further bolstered demand for safe havens.
The focus is now on the 4,660 area, a break of which could test the 161.8% Fibonacci extension of the latest decline at 4,722, ahead of the 4,800 round level.
Technically, the bulls remain in control, supported by the positive trajectory of technical indicators. However, with the stochastic oscillator and the RSI hovering near overbought levels, upside potential may be limited in the coming sessions.
Traders may need a clear close above the 4,550–4,600 region to target higher levels. If the price fails to maintain momentum above that ceiling, it could reverse lower to seek support around the protective 20-day simple moving average (SMA) at 4,400. Further declines could then test the 50-day SMA, which is fast approaching the support trendline at 4,265, while lower the price could pause within the constraining 4,175 area.
In short, the precious metal may unlock fresh all-time highs in the coming sessions, although technical exhaustion remains possible given the overbought conditions.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.