Gold pierces $1,400 mark to flash fresh 69-month high amid surge in safe-haven demand
- Fresh geopolitical tension concerning the US, Iran and Saudi Arabia adds into the prevailing Gold rally backed by fears of the global recession.
- The US Dollar (USD) weakness further strengthens the yellow metal to revisit September 2013 highs.
The recent bout of risk-off provides additional strength to the Gold price rally that touched a 69-month high of $1,411.35 before currently trading near $1404 ahead of Europe open on Friday.
While global recession fears and the US Federal Reserve’s dovish tilt were already pleasing the bullion buyers off-late, political uneasiness between the US and Iran coupled with likely tension emanating from the US-Saudi Arabia relations, offered extra run-up to the yellow metal.
Iran recently complained to the United Nations (UN) that the US has started flying unmanned aircraft in their airspaces, which in-turn might push them to retaliate. Afterward, the US Federal Aviation Administration (FAA) prohibited flying in an area over the Strait of Hormuz and the Gulf of Oman. The news was also on the round that the US President Donald Trump abruptly pulled the call back to strike Iran.
Elsewhere, UN released a report claiming that it has proofs that can hold the Saudi Arabian Crown Prince Mohammed bin Salman liable for the murder of the US journalist Jamal Khashoggi increased fears of tense relations between the global super-powers.
It’s worth noting that the Gold touched record highs in Australian Dollar terms while call premiums topped since 2008.
Moving on, investors may seek fresh clues from global politics to determine near-term trade direction as the economic calendar is almost empty on the US side while has few Purchasing Manager Index (PMI) releases scheduled from the EU.
Technical Analysis
August 2013 high around $1,434 may offer an intermediate halt to the precious metal’s further advances towards April 2013 top of $1,488 and then to $1,500 round-figure.
Alternatively, March 2014 high of $1,392 and July 2016 top near $1,375 can please sellers during the pullback.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
