Gold price rose to a six-month high on Thursday as a result of investor concerns for a slowdown in the global economy. The stock market volatility further contributed to the appreciation of the precious metal, which is usually considered as a safe haven for investors.
The precious metal built on its recent positive momentum and was off to a good start in 2019. The ongoing up-move to the highest level since mid-June remained supported by growing worries about a sharp global economic slowdown, which propelled demand for perceived safe-haven assets, including gold.
The spot price of gold touched its highest value since June 15, at a level of 1,290.90 USD, while early this morning it traded at 1,289 USD per ounce.
The weaker dollar has brought extra support to gold. People are more interested in gold because stock markets are under pressure and are looking for gold as a safe haven. The dollar index fell by 0.3% yesterday. The Japanese yen, which is also seen as a preferred asset during economic instability, rose against the dollar on Thursday.
Today’s US economic data to provide some impetus ahead of Friday’s NFP. Markets will look for signals for the Fed’s further policy and potential interest rate hikes, from a joint discussion between the Fed’s chairman Jerome Powell and his predecessors, Janet Yellen and Ben Bernanke, on Friday.
Gold is highly sensitive to rising interest rates that have an impact on dollar levels.
The gold price of 1,280 USD is a good level of support and many investors expect an increase of the price of the precious metal to 1,300 USD very soon and continue to the next key levels of 1,350 USD, or perhaps 1,400 USD, this year.
There is also a major tailwind for gold early in the year, due to buying ahead of Lunar New Year holidays in much of the world.
The world’s largest secured exchange-traded fund (ETF) SPDR Gold Trust reported that its gold reserves rose by 0.97% to 795.31 tonnes on Wednesday from 787.67 tonnes on Monday.
Among other precious metals, the palladium rose by 0.7% to 1,263.60 USD per ounce, while platinum declined 0.1% to 793.40 USD per ounce.
Gold price technical analysis
During the trading yesterday, gold increased its value from 1282.21 to 1284.28 USD per ounce. This morning it traded at 1,289.70 USD.
If the gold overcomes the resistance zone 1,289.06-1,289.29 USD, the movement will target reaching and testing the zone 1,293.85-1,293.96 USD per ounce. Upon success, the upward trend will continue to 1,299.07-1,299.30 USD per ounce.
When falling below the support zone 1,279.28-1,279.05 USD per ounce, then the next support will be the zone 1,273.94-1,273.83 USD per ounce. In the case of breakthrough, the downward trend will continue to 1,269.27-1,269.04 USD per ounce.
Silver price technical analysis
During trading yesterday, silver rose from 15.43 USD to 15.49 USD per ounce. This morning it traded at 15.55 USD.
If silver overcomes the resistance zone of 15.62-15.64 USD per ounce, the movement will target reaching and testing the zone 15.75-15.76 USD per ounce. Upon success, the upward movement will continue at 15.91-15.93 USD.
If silver falls below the support area of 15.35-15.33 USD, the next support will be the zone 15.18-15.17 USD. In the case of a breakthrough, the downward trend will continue to 15.06-15.04 USD.