The recent bout of risk-off provides additional strength to the Gold price rally that touched a 5 year high of $1411.35 per ounce during today’s early session. 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 that the US has started flying unmanned aircraft in their airspace, which in-turn might push them to retaliate. 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. Moving on, investors may seek fresh clues from global politics to determine near-term trade direction as the economic calendar is almost empty.
Gold prices continued with its surge and this time touching a 5-year high of $1411.35 per ounce as of this morning before quickly retreating below the $1400 mark. The price is currently trading just above the 1395 level with a descending momentum as we can see on the RSI chart. At this point we expect at least a small retreat in prices after this overextended move and we will be focusing on near support level especially the $1382.76 support level.
Support: 1392.8 / 1382.76
Resistance: 1401.62 / 1403.86