Wild Price Swings In Gold Futures
Conflicting News Signals
Gold prices are on watch today following heavy volatility in the last 24hrs. The futures market collapsed lower yesterday as news of Trump’s 5-day ceasefire announcement hit the wires. Prices sank by more than 8% to hit their lowest levels since November before reversing sharply now almost trading back up around yesterday’s opening price. The volatility comes amidst heavy move sin the oil market and confusion over the status of the conflict between the US and Iran following Trump’s announcement and Iran’s subsequent denial. Trump claimed a weekend of positive talks leading to 15 points of agreement between the US and Iran and the prospect of a broader peace deal on the horizon. However, Tehran claims no dialogue has been entered into with the US and has continued to attack US bases in the Gulf area.
Near-Term Uncertainty
With traders awaiting clarity, further volatility looks likely as markets react to incoming news-flow. For now, the US is holding off from any attacks on Iranian energy sites with the prospect of talks emerging while this remains the case. If we do get confirmation of talks, this should see gold coming under fresh selling pressure near-term as safe-haven demand weakens further. However, if the 5 days pass without any positive news and Trump decides to go ahead with earlier signalled attacks on Iran’s energy sites, this could see gold prices spiking higher as safe-haven demand returns.
Technical Views
Gold
The sell off saw gold futures breaking down below the 4,389.24 level yesterday before reversing sharply to trade back above. While price holds atop this level, focus is on a further recovery back above the 4,548.82-level next. If we break down from here, 3,898.03 will be the next support zone to watch, in line with bearish momentum studies readings.
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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.