Gold Higher After U.S. AirstrikePosted 01/03/2020 8:50AM CT |
Uncertainty and tensions spiked in the Middle East with the U.S. airstrike overnight which killed an Iranian military leader. The February gold contract traded up to a high of 1554.0 in the overnight session and will likely close positive for the fourth week in a row. Earlier this week we saw weakness in Chinese gold imports for the month of November as well as a decline in India’s gold imports last year. The short-term trend in the gold market remains higher since it broke resistance of 1490.0 on December 24th. Momentum studies are approaching overbought levels which could indicate a pullback. A close below 1513.0 is needed to reverse the trend to the downside. Over the past month the gold market has held up well despite continued gains in in the stock market. Any escalations with the Middle East could see a risk off environment with a flight to safe-haven assets.