Gold at 3-Week High As Investors Turn to Safe Haven Assets

Gold prices sent to 3-week high on Tuesday as risk-averse investors rushed to add gold futures in their portfolios amid concerns for U.S. administration. Both the U.S. dollar and the U.S. stocks suffered significant losses during the Asian session on Tuesday as market participants believe that U.S. President Donald Trump’s plans to increase infrastructure spending and tax reforms will face severe difficulties to be applied. The concerns started from the worries that Trump may not get enough votes to pass a new healthcare bill through congress on Thursday (and repeal Obamacare), which bring into question whether he has the ability to pass other reforms scheduled in his agenda. Meanwhile, the sterling is risky due to the beginning of Brexit complex negotiations next Wednesday and euro faces political risks ahead of many elections in the country-members as well as the fear that other E.U. countries may attempt to exit from the union. All these risks surrounding around forex market turned investor to safe haven asset gold which it currently enjoys its gains.

XAU/USD – Technical Outlook
Gold prices almost recovered the losses of the previous sessions following the strong rebound on the 50.0% Fibonacci retracement level of the last upward move with low on December 15th and high on February 27[SUP]th[/SUP] which coincides with the 100-daily SMA and the support barrier at $1,196. The next initial target will be the $1,265 resistance level, however the price it needs to go through the 200-daily SMA which is near the $1,247 price level. Additionally, the yellow metal surged more than 3.4% since last week and is creating the second green week in a row.

As you can see below, on the short-term chart, the RSI indicator is moving towards the overbought territory whilst the MACD oscillator entered the positive path. On the 4-hour chart, the moving averages are sloping upwards and the 50-SMA is in progress to create a bullish crossover with the 100 and 200 SMAs.


JFD Research