How on Earth Can Gold Decline During the US – Iran Crisis?
So, did U.S. and Iran just become best friends?
Gold’s huge reversal and a decline of about $50 in 24 hours might certainly suggest so to those, who choose to follow the news instead of estimating market’s moves using more reliable tools.
Of course, the two countries are not on friendly terms at this time. So, what happened that gold declined so much, so fast? Let’s start with going over what we explained yesterday as gold’s price action confirmed it so well. Read more...
Gold: Investors on edge, speculators ready to bid on mixed geopolitical sentiment
The price of gold is on the back foot on Thursday, bleeding additional dollars following the speculative sell-out on the back of the de-escalation in the Persian Gulf conflict surrounding a series of US and Iran's tit-for-tat retaliation strikes.
The speculative bid was squeezed out sharply from the post-US drone strike highs of $1,611 (a fresh yearly high) when markets got the hint from Iran, that should the US hold fire, there would be no further attacks.
The price of gold eventually plummeted after Wednesday's US President Donald Trump’s address to the nation which was well balanced between, we don't want war, nor does Iran, but we will sanction Iran for misbehaving.
Subsequently, prices are back to levels traded prior to the killing of the Iranian general which occurred last week. With geopolitics in the rear-view, the immediate focus will turn to position, which rests at extreme levels.
"It is worth reiterating that gold bulls have virtually no dry-powder left, with both an extreme number of traders long and a larger-than-expected position held on a per-trader basis,"
– analysts at TD Securities argued. Read more...
Gold Price Analysis: XAU/USD easing from multi-year tops, trades sub-$1560/oz
Gold is trading in a bull trend above its main monthly simple moving averages (SMAs). The metal is trying to breakout above the 1560/1600 price zone. If the buyers overcome this critical resistance zone on a daily basis, the metal might move up towards the 1730 and 1900 resistance levels.
Gold daily chart
The metal is rejecting the 1600 figure and is now trading below the 1560 resistance. A daily close below the 1560 level could entail the beginning of a correction down. Read more...
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