Gold powers higher in early Asia, leaping from 1310 to 1325 at one stage as North Korea conducted a missile test that flew over Japan. Gold has pulled back since as USD/JPY, and the Nikkei regained some of their losses but still sits AT 1318.00, up 0.60% on the day. Risk aversion following this morning’s missile test should see gold bid on any dip from these
The events of this morning have somewhat overshadowed gold’s performance in the New York session where gold proceeded directly to go and put in a monster 20 dollar rally from its opening 1290.00 level. Trump’s negative comments on the NAFTA renegotiation and no tightening signals from Jackson Hole see U.S. dollar selling renew with vigour in New York.
Gold broke the previous monthly high at 1301.00 with ease which will now become an intraday pivot level. The momentum of the rally is impressive although we note that the daily relative strength index is entering an overbought territory which may slow gold’s ascent temporarily in the absence of any more geopolitical tensions.
Nevertheless, with the U.S. dollar and stock markets under pressure, today gold should find support at 1310.00, and its initial target around 1337.00 is now well and truly in sight, perhaps sooner rather than later.