Gold gains altitude, nears 200-DMA
Gold is shining brightly this Monday morning as the risk-off tone in the markets is forcing investors to pour money into the safe haven yellow metal, which is trading just a shy away from the 200-DMA located at $1259.25.
Safe havens rally
Trump withdrew the health care bill on Friday after it failed to gain enough support to pass in Congress.
Thus, investors are worried whether President Trump will be able to push through with his next set of policies… especially on the fiscal front and that is forcing them to unwind risk positions in favor of the safe haven assets like gold and the treasuries.
Moreover, the falling odds of Trump delivering on tax/fiscal front also means slower-than-expected/no Fed rate hikes, which further strengthens gold’s appeal as a haven asset.
Gold may jump above the 200-DMA level of $1259.25 later today if the risk aversion worsens as suggested by the sell-off in the AUD/JPY pair.
Gold Technical Levels
At the time of writing, the metal was trading at $1256/Oz levels. A break above $1259.25 (200-DMA) would expose $1263.87 (Feb 27 high). A daily close above the same would establish higher lows and higher highs formation and open doors for $1300 (zero figure). On the other hand, a breakdown of support at $1244.83 (session low) could yield a sell-off to $1233.20 (5-DMA) and $1208.08 (Mar 28 low).
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
