Softer Oil & USD Boosts Gold Demand
Gold Rallying on Peace Hopes
Gold prices are pushing higher today as the reversal off Monday’s multi-month lows continues to gain traction. Futures prices are now up around 12% with the move, rather counter-intuitively, being drive emerging hopes for a potential US/Iran peace deal. News that the US has submitted a 15-point peace proposal to Iran has helped tame energy prices midweek with USD coming off consequently. While there is still plenty of uncertainty around the prospect of a peace deal given that Iran is still denying any dialogue has taken place between the two sides, all focus now is on whether delegates will meet for talks proposed later today in Pakistan. If those talks take place, that will be the first concrete sign of progress and gold prices could push firmly higher as energy price and USD move deeper.
Bearish Gold Risks
The risk, however, is that Iran refuses to take part in talks or that talks immediately fail. In this scenario, risks of the conflict dragging on longer will rise, leading energy prices and USD back up and creating fresh downside pressure on gold. As such, there is plenty of two-way risk for gold prices over the next 24 hours as traders await incoming headlines and greater clarity on the situation.
Technical Views
XAUUSD
The rally in gold has seen the market moving back above the 4,548.82 level. While back above here, focus is on a continued recovery higher in line with momentum studies turning higher of flows. A retest of the broken bull channel will be the first hurdle for bulls with 5,113.51 above as the next resistance to note. To the downside, 3,898.03 is the key support to watch if we reverse lower again.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.