Gold unstoppable, rises above $1325 for the first time since February
- Risk aversion and more recently comments from Fed’s Bullard about a rate cut boosted XAU/USD.
- Price gains almost $50 in three trading days, on a dramatic rally.
Gold prices continue to rise, and from the level it had on Thursday is up almost by $50. Today gained so far $20 and recently reached at $1325/oz the highest level since late February.
The technical outlook improved significantly on Friday after it broke a 5-day range on top of $1285; on Friday kept rising, surpassing previous monthly highs slightly above $1300 and today the resistance at $1310. Despite showing overbought extreme reading in the short-term the rally continues with momentum and now it is testing the $1325 zone.
Trade tensions boosted the demand for safe-haven assets triggering the rally in gold and in US bonds. Over the last hours, it gains more strength for another leg higher and US yields move to daily lows as market started to price in a rate cut from the Federal Reserve. The 10-year yield is back under 2.10%.
Comments from Fed’s James Bullard weakened the greenback across the board. The DXY extend losses and fell to 97.20 the lowest May 13. Bullard mentioned a rate cut may be "warranted soon" amid the risks surrounding the trade war and subdued inflation. The Dollar was already weak following lower-than-expected manufacturing data from the US.
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Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
