Trump tariff tango keeps Gold furious, new record high $4,093
|Gold price action has made strong consolidation above psychological zone $4000 after attracting buyers on dips around $3944 and a confirmed breakout above $4000 has triggered decisive breakout rally supported by Friday's close above $4018 which witnessed a rebalancing move towards $40002 lows with follow up buying momentum extending bullish leg to $4093 as any pullback is quickly being absorbed by value buyers given the prevailing global uncertainties and geo political woes while US Government shutdown keeps most of fiscal operations in chaos and major economic data releases postponed.
Fundamental drivers
US Government shutdown continues with no signs of agreement in Congress to resolve the deadlock keeping fiscal operations under utter chaos.
Major economic data releases are postponed and on hold due to government shutdown and markets have no clue to economic situations.
Markets continue to expect a rate cut in key interest by Federal Reserve this month as well as in December.
Geo political uncertainties in France and Japan affect investor sentiments increasing safe haven demand for Gold.
Trump's announcement to impose additional 100% trade tariff on China and additional export restrictions create panic and cause to elevated risk avoiding with money rushing to Gold.
Friday's massive sell off in Dow Jones and Nasdaq as well as Bitcoin shifted smart money flow to Gold as markets expect yet another run to $4200-$4400 in near term supported by price stability above psychological zone of $4000
Technical drivers
In tune with the primary bullish trend and macro factors supporting bets for Gold rush to $4200-$4400 Gold successfully reclaimed $4000 as immediate support base and launchpad for next bullish wave.
Recent $114 drop from $4059 down to $3944 helped the metal shed its overbought conditions and witnessed strong rebound resuming the main bullish momentum closing the week at $4018 which continued and extended the rally to $4093 as markets expect further upside move towards $4130-$4150
The buying momentum is getting strong support by price stability above $4000 zone and immediate support zone $4068-$4058 while rally is very likely to extend higher once immediate hurdle $4106 is cleared, opening the path to next leg higher $4130 followed by $4150
Caution Points: The heights are often prone to gravity and come with high risks of sudden corrections due to cautious retail profit bookings on a slight hint of news.
Overall Outlook: While the broad price action is precisely bullish as long as the psychological zone $4000 holds as support and upward momentum continues setting new and fresh record highs, RSI on daily time frame reads 80 where as monthly RSI reads 91 giving overbought signals calling for imminent correction in near term.
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.