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Gold extends rally on increased safe-haven bids

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 24, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    Fresh bids emerged near 1225 region, sending the bullion back towards daily highs on the back of increased flight to safety amid persisting risk-aversion.

    Gold re-takes $ 1230

    Currently, gold rises 0.50% to 1228.60, having posted daily highs at 1233.30 and day’s low at 1224.90. The slump in the global equities extends for the second straight session as the oil price declines spooked markets once again and bolstered the safe-haven bids for gold. Japan’s Nikkei drops -0.86%,, while the Australian ASX 200 is are down -1.87%. Oil prices are falling 1.50-2.50%

    Further, in another sign of rising demand for the precious metal, assets in SPDR Gold Trust, the top gold-backed ETF, sit at their highest since March 2015. The fund's inflows since the start of 2016 have already surpassed outflows for the whole of 2015.

    In the day ahead, the prevalent risk-off/on sentiment in the market will continue to dictate the moves in the bullion. While the US new home sales and services PMI report will be eyed for fresh cues on the US dollar.

    Gold Technical Levels

    The metal has an immediate resistance at 1233.30 (daily high) and 1239.20 (Feb 18 High). Meanwhile, the support stands at 1221.28/1220 (10-DMA/ 200-DMA) below which doors could open for 1217/14 (1h 50-SMA/ daily S1).
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