Gold price is rising strongly and surged to over one-month top, closer to 1,240 USD per ounce. After yesterday’s late pull-back, a combination of supporting factors helped the precious metal to regain positive traction for the second consecutive session, also marking the fourth day of up-move in the previous five.
The investors’ sentiment to the metal is bullish, having cleared the resistance of the trendline connecting the October 26 low and November 7 low. That breakout gained credence as prices moved above the horizontal resistance of 1,230.30 USD. The 5-day and 10-day simple moving averages (SMAs) are also trending up. As a result, gold could test October high of 1,243 USD in the next couple of days.
Against the backdrop of a temporary ceasing of the US-China trade war, a sharp decline in the US bond yields exerted some additional downward pressure on the US Dollar and underpinned demand for the dollar-denominated commodity.
In its latest client note, analysts at Goldman Sachs upped the gold price forecasts for the next 12 months. According to the analysts, the gold will head up to 1,350 USD per ounce within 12 months. The investment bank looking for flows into gold ETFs to grow next year on account of the late-cycle demand.
However, another US investment bank JPMorgan Chase advised investors to avoid traditional safe havens such as gold to mitigate the impact of geopolitical impact. Instead, the bank recommends targeting the dollar or indices that measure the volatility of the stock markets.
Gold price technical analysis
During the trading yesterday, the gold increased its value from 1,222.55 USD to 1,230.25 USD per ounce. This morning it traded at 1236.50 USD per ounce.
According to the analysts, if the gold overcomes the resistance zone 1,236.32-1,237.08 USD, it will move up testing the zone 1,242.39-1,242.77 USD. Upon success, the upward trend will continue to 1,249.98-1,250.74 USD.
In case of falling below the support area 1,223.42-1,222.66 USD, then the next support will be at 1,215.45-1,215.07 USD. If the gold breakthrough the support zone the downward trend may continue to 1,209.76-1,209.01 USD.
Silver price technical analysis
During trading yesterday, the silver rose from 14.22 USD to 14.37 USD per ounce. This morning it traded at 14.45 USD per ounce.
Today, if silver overcomes the resistance range of 14.55-14.57 USD, it will test the zone 14.73-14.75 USD. Upon success, the upward movement will continue at 14.91-14.92 USD.
If the silver fells below the support zone 14.18-14.16 USD, then the next support will be the zone 14.01-13.99 USD. In case of a breakthrough, the downward trend may continue to 13.82 – 13.81 USD.
Strong gold demand in Northern Ireland
People in Northern Ireland are starting to accumulate gold in recent months, on the background of growing fears for Hard Brexit.
The Irish gold storage company Merrion Vaults is experiencing “golden times” as its customers in Northern Ireland are up by 70%.
“In the five years in which our treasury sells and stores gold, we have never seen such an increased demand as the current one”, said the co-founder of the company, Seamus Fahy.
Among the clients who want to export their gold from the United Kingdom and transfer it to Ireland, there are investors, pension fund managers, and small businesses. Relocation of assets begins long before the recent Brexit warnings.
“They believe that while there is stability in the British economy, investment in gold is the safest option”, explains Seamus Fahy.
Investing in precious metals is considered a good way to protect against inflation, which can seriously increase if Britain leaves the European Union without a deal and the value of pounds collapses.
In November, another Irish company – GoldCore introduced golden vaults for institutional investors and expressed expectations that Dublin will compete London as a preferred gold storage place.