Gold: Strong near multi-year top amid upbeat safe-haven demand

Gold holds the top spot in buyers list as the US treasury yields trigger global recession fears.
Mixed signals from trade/political headlines also add to the safe-haven demand.

Anil Panchal FXStreet

With the fears of global economic slowdown acquiring the front seat of the market story, Gold takes the bids to $1521 heading into the European session on Thursday.

Not only inversion of the US 10-year to two-year Treasury yields but record low yields of 30-year notes also question market optimism surrounding latest turn in the US-China trade relation.

Mostly cited reason for investors’ rush to risk-safety targets disappointing activity numbers from China and the EU while Hong Kong political plays and global easy monetary policy adds to the line. Challenging the move is the Reuters’ news that Chinese imports of Gold have are likely down by 300-500 tonnes since May 2019.

Traders may now look forward to the busy economic calendar comprising the US/UK Retail Sales, the US Industrial Production, Initial Jobless Claims and Philadelphia Fed Manufacturing Survey.

The US President Donald Trump’s reaction to the latest criticism from Hong Kong and further action on a trade deal with China will also keep investors busy during the day.

Technical Analysis

FXStreet Analyst, Ross J. Burland, expects further increase in the yellow metal’s prices to fresh 2019 high:

The price of the yellow metal has fliped back in a bullish trend, reversing losses seen in the prior session. The trend has been in development since a break above the 1450s and has been moving higher for the best part of August. The 1500 level was penetrated to 1480 in recent sessions but the bulls committed for a continuation, to the upside. From here, the 1528/30s come as a prior support area where the price was to be expected to hold initial tests. However, on a full-on break higher, bulls will look to the 127.2% Fibo target which is located around 1,560, guarding the Oct 2012 highs at 1795.

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.

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