Gold prices were rising in early trading amid further geopolitical tensions in the Middle East, which are pushing investors to look for haven assets. And one analyst believes the precious metal could soon soar.
The price has recovered significantly since the end of last year, rising 6.46%, over the past three months and further tension in the Red Sea has bolstered his trend.
In the latest attack roiling global shipping amid Israel’s war with Hamas in the Gaza Strip, Houthi rebels in Yemen fired an antiship cruise missile toward an American destroyer in the Red Sea on Sunday. U.S. officials said it was shot down by one of their jet fighters.
However, while the conflict in the area is driving investors to havens, there are other indicators that gold may undergo a bullish breakout. Oanda senior market analyst Kelvin Wong has been studying charts to identify trends.
He said in an email that gold staged a V-shaped bullish reversal in the latter half of last week, at the lower boundary of its medium-term ascending channel—which has been in place since early October. He said this goes together with a “bullish momentum condition,” signaled by the daily relative strength index’s momentum indicator.
Also, gold has risen above the upper boundary of a former minor descending channel that has been intact since late December and the 20-day moving average, based on the one-hour chart, added the analyst. He pegged the next resistance level to watch as $2,090 per ounce.
Spot gold was trading up 0.29% at $2,057 per ounce early Monday.
Write to Patrick O’Donnell at [email protected]
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