Gold price surged past 1600 for the first time in nearly 8 years after the markets went into full risk-off sentiment following reports of missile strikes by Iran at US bases located in Iraq. US officials have confirmed that a series of retaliatory missile strikes by Iran had taken place across several locations, including the al-Asad military base which houses US military personnel.
Reuters is quoting White House spokeswoman Stephanie Grisham as saying that US President Donald Trump had been briefed on the strikes and that he was monitoring the situation closely with the national security team.
The Pentagon has also released a statement saying “we will take all necessary measures to protect and defend US personnel, partners, and allies in the region…”
Read our Best Trading Ideas for 2020.
Market Impact on Gold Price
Safe haven demand for less risky assets has surged in the last two hours, with gold price breaching the 1600 mark for the first time since April 2012. It therefore violates the initial resistance that was seen earlier today at 1566.79, following its break from the bullish flag on the weekly chart.
Continued gold demand will see XAUUSD test the 1635.53 resistance area, where previous highs of 28 May 2012 were seen. A break above this level then opens the door for further targeting of highs around 1666 and 1700 as gold price action seeks to complete the measured move from the bullish flag.
On the flip side, a pullback from present levels or from 1635 could retest 1566 and 1494, in that order if profit taking ensues.
The situation continues to remain fluid and further retaliation by the US could extend the risk-off sentiment with further upside on gold prices.
Don’t miss a beat! Follow us on Telegram and Twitter.
More content
- Download our latest quarterly market outlook for our longer-term trade ideas.
- Follow Eno on Twitter.
- Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.