Gold remains supported as yields and stocks struggle
|Thanks to a pullback in bond yields and an equity market sell-off, yesterday saw gold climbed to its best level since July to reach a critical resistance level around $1238-40. The metal is now up for the fourth consecutive week as a result of investors moving out of equities and into the relative safety of government debt. In the event yields were to fall further then gold could potentially rise even more.
However, the longer-term outlook for the metal remains murky at best, as major central banks continue to tighten their belts. The US dollar remains among the strongest of currencies out there and with the Dollar Index trending higher, this could be an additional factor weighing on buck-denominated gold prices.
But for the time being, the bulls are in control and will remain so unless gold breaks back below the most recent low at $1183. Monday’s low around $1220 is meanwhile a short-term pivotal level that the bulls need defend, else the metal could go back to $1205 support before it decides on its next move.
If the bullish trend remains intact and the metal goes on to break through that $1238-40 resistance, then in this case we could see a continuation towards the 200-day moving average at $1262 next.
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.