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Gold Still Has Significant Upside After Prices Hit Five-Month Highs – Analyst | Kitco News

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Gold Still Has Significant Upside After Prices Hit Five-Month Highs – Analyst Neils Christensen Wednesday April 12, 2017 11:52
Kitco News
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( Kitco News ) – After finally breaking key resistance at $1,270 an ounce and hitting five-month highs, the gold market could have further significant upside, according to one technical analyst.
In a recent note, Chris Vecchio, senior currency strategist at DailyFX.com, said gold’s rally has momentum as investors and traders look for safe-haven assets ahead of the long Easter weekend. He noted that gold’s rally coincides with a rally in the Japanese yen and falling bond yields, which are also seen as safe-haven investments.
“FX and commodity markets are offering a fairly ominous warning to global financial markets: seek shelter from the incoming storm. When non-market/geopolitical risks are rising, particularly around holidays, traders begin to take shelter in safe-haven assets like gold or the Japanese yen,” he said his note. “No one who will be away from their desk for an extended period of time wants to be caught on the wrong side of a surprise. The fact that we’ve seen gold, the yen, and U.S. yields all move in tandem shouldn’t be taken lightly.”
Tensions between U.S. and Russian are rising following last week’s missile strike against a Syrian military airbase; at the same time, pressure is growing among China, the U.S. and North Korea after a U.S. Navy strike group was sent to the region.
Looking at the technical picture, Vecchio said in an email to Kitco that a close Friday above $1,280 an ounce would create an initial target to $1,306 an ounce, with the next resistance level at $1,336 an ounce. June gold futures last traded at $1,277.80 an ounce, just $4 down from its five-month highs seen earlier in the session.
For gold traders, the CME will be closed Friday in recognition of Good Friday; however, electronic trading will see a regular open at 6 p.m. EDT Sunday. In Britain, the London Metals Exchange will be closed Friday and Monday, with regular trading resuming Tuesday. For ETF traders, the New York Stock Exchange will also be closed Friday and open Monday.
While North American markets are closed Friday, the U.S. government is still open and will be releasing retail sales numbers and Consumer Price Index data, which Vecchio said could create some risk for gold when markets reopen.

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