SwanBitcoin445X250

Gold 2 Hour Price Chart

Gold (XAU) Fundamental Forecast: Neutral

  • Safe-haven assets rally hard after US drone strike kills top Iranian military general.
  • A dangerous face-off may now ensue, fueling demand for safe-haven assets.

What are Safe-Haven Assets and How to Trade Them[1]

Gold’s Rally Nears a Fresh Multi-Year High

The price of gold[2] has jumped higher in the first couple of trading days in 2020 and is now around $100/oz. higher than the multi-month low set on November 12 last year. A US drone strike has killed top Iranian general Qasem Soleimani, in relation for the recent attack on the US embassy in Baghdad, sending safe-haven sharply higher with gold and crude oil[3] leading the charge. While my outlook for gold next is neutral, the precious metal will remain strongly underpinned in the short-term and may turn sharply higher if tensions in the Middle East escalate further. Next week’s price action, when the market is fully up-and-running after the holiday season, may well be choppy.

Strait of Hormuz: The World’s Most Important Oil Chokepoint[4]

While the US-Iran situation rightly makes most of the headlines, geopolitical risks are rising elsewhere. The Turkish parliament recently approved sending troops into Libya to aid the government in its crackdown on rebel forces, while North Korean leader Kim Jong Un suggested recently that he may pull-back on his self-imposed two-year moratorium on nuclear and long-range missile testing, an action that would test US President Trump’s patience further.

The price of gold hit a $1,552/oz. high early Friday, just below the $1,557/oz. peak made on September 4. This print was the highest since April 2013. With little to no resistance before this high, gold may well continue its rally in the short-term. The weekly chart highlights three prints

Read more from our friends at Daily FX