Gold advances to highest level since November, tests $1300
The demand for the precious metal remains high on Friday, pushing the XAU/USD pair to its highest level in more than 9 months at $1300.80. As of writing, the pair was trading at $1297.45, gaining nearly $10, or 0.75%, on the day.
Political turmoil in the U.S. and yesterday's terrorist attack in Barcelona triggered a flight-to-safety on Friday, allowing safe-havens like gold and the JPY gather strength against its peers. The weak risk appetite could also be seen in the falling global equity indexes. Following sharp losses in European indices, Wall Street started the day lower, with the Dow Jones Industrial Average losing 0.4%, and the S&P 500 dropping 0.15% at the moment.
The only noteworthy data from the U.S., University of Michigan Consumer Sentiment Index, advanced to 97.6 from 93.4 in August, bettering the market expectation of 94. However, the better-than-expected reading was largely ignored by the participants. At the moment, the US Dollar Index is at 93.35, losing 0.3% on the day. There are no more data left in the remainder of the session and the pair is looking to close its second straight week with earnings.
Technical outlook
With today's upsurge, the pair pushed above the upper band of the Bollinger Band on the daily graph, suggesting that the pair is technically overbought. Moreover, the RSI on the same graph is sitting near the 70 mark, supporting this technical outlook. A weekly close above $1300 could open the door for more gains. $1308 (Nov. 2, 2016, high) could be the initial target before $1320 (Oct. 3, 2016, high) and $1336 (Nov. 9, 2016, high). On the downside, supports could be seen at $1285 (daily low), $1273 (20-DMA) and $1256 (Aug. 2 low).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
