Gold soars to $1372 on persistent global uncertainty
|Brexit-led uncertainty triggered a fresh bout of global risk-aversion trade and is boosting the safe-haven appeal of Gold, which has now jumped to its highest level since March 2014.
Following a brief pause during early part of the previous week, the yellow metal resumed its bullish momentum and is now headed to post a sixth consecutive day of advances. The latest leg of up-move seems to have been led by a fresh bout of short-covering after the precious metal decisively traded above Brexit-led swing high level of $1358.
Persistent uncertain environment, leading to a risk-off sentiment as depicted by a sell-off in equity markets across the world, has been the key factor supporting a strong bullish momentum across safe-haven assets, including gold. Adding to this, prospects of further monetary easing by major central banks, especially BOE, and diming possibilities of any further Fed rate-hike in 2016, is fueling the ongoing bullish momentum.
Currently trading near multi-month highs, at $1372, traders would now focus on today's economic releases from the US, including - ISM services PMI and FOMC meeting minutes, for some momentum play. However, Friday's US monthly employment data, popularly known as NFP, now become more critical in determining the near-term direction for the US Dollar, which would eventually drive the yellow metal.
Technical levels to watch
The metal is currently trading near 61.8% Fibonacci expansion level of Brexit-led sharp up-swing and subsequent retracement. Hence, a sustained buying interest above this immediate resistance, near $1370 level, seems to continue boosting the precious metal in the near-term, possibly towards its next major resistance near $1390-92 area marking 2014 yearly highs. Meanwhile on the downside, any signs of profit taking might now find immediate support near previous swing highs resistance near $1360-58 area. A follow through profit-taking move now seems to get bought into and hence, any further downside might be limited till $1350 round figure support.
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