The gold price has pulled back slightly in today’s trading session after having its best bull run since 2011 and some predict we may not have seen the last of gold’s gains.
After moving sideways for most of November then suddenly dropping at the beginning of December, the precious metal surged to finish off 2017 strongly which continued for the 1st few day’s in 2018.
Three interest rates hikes by the US Federal Reserve last year as well as three more planned hikes this year have not been enough to subdue the gold price and the usual pattern of higher rates, lower gold prices may be falling by the wayside,
“As global complacency over the trajectory of U.S. rates continues to be astoundingly low, precious metals in general should continue to benefit,” said Jeffrey Halley, senior market analyst at Oanda Corp. in Singapore.
Rising tensions in Iran as demonstrators demand the resignation of Iranian Supreme Leader Ayatollah Ali Khamenei after allegations of corruption and mismanagement of the economy has led to the death of more than 20 people and threatens to escalate, as pro government supporters join the protest in a counter demonstration.
This may see gold receive further support as a safe haven until the situation stabilizes which doesn’t look like happening anytime soon.
“We should tap the short term opportunities to go long as gold has crossed $1,300 with a momentum. It may act as a support, while $1,340 could be an immediate resistance level and we might reach $1,400 in the first quarter this year.” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.
Further evidence of gold’s connection and volatility towards to interest rate hikes in the US will come today with the release of the minutes from the Fed where they are expected to lay out there economic platform moving forward as well as the Non-farm payrolls figure and unemployment rate on Friday.