Gold Reaches $1,610/oz Prior To Retreating, Oil Higher and Stocks Lower As Iran Attacks U.S. Bases


Gold surged to a seven year high at $1,610.90 overnight prior to retreating as markets experience volatility due to the risks of a U.S. retaliation after Iran’s attacks on U.S. bases in Iraq.

The severe, but long expected, re-escalation of geopolitical tensions led to the gold price surging overnight as speculators go long gold futures and investors diversify into the hedging and safe haven asset that is gold.

U.S. stock futures tumbled this morning in response to Iran’s retaliation against the U.S. in rocket attacks on two Iraq bases. The S&P 500 index future lost almost 1.5%, breaking down a key support level at 3,200 points.

Asian and European equity markets followed US futures lower prior to stabilizing, as investors reduced allocations to risk assets and moved into safe havens.

From a trading perspective, gold is very overbought after the 10% move higher in the last 30 days. However, the scale of the geopolitical uncertainty could see gold stay overbought in the short term.

If things deteriorate significantly in the Middle East then we will likely see oil prices surge and there is a strong possibility of a massive short squeeze which propels gold (and silver) prices much higher. A close above $1,600/oz should see us move quickly higher to test the $1,700/oz level.

Gold’s record nominal highs at $1,900/oz (see chart below) may be surpassed later this year given the very strong demand for gold bullion due to the host of financial, geopolitical and monetary risks

Prudent gold bullion investors will as ever take a long term view and those seeking to diversify and hedge risks with an allocation to gold, should
dollar cost average into their gold holding.


NEWS and COMMENTARY

Gold retreats from $1,600 as markets eye U.S. reaction after Iran attacks

Gold price scales $1,600 after Iran attacks US military base

Gold price surges amid geopolitical uncertainty

Dow futures plunge after Iran retaliation raises fears of bigger conflict

Oil prices surge 4% following attack on Iraq airbase

Iran’s overnight strikes on American bases ‘a slap in the face’ for US – Khamenei

Ukraine International Airline jet crashes killing 176 in Tehran

Precious Metals Update Video: Resistances and supports



GOLD PRICES (USD, GBP & EUR – AM/ PM LBMA Fix)


07-Jan-20 1566.50 1567.85, 1190.85 1197.05 & 1402.80 1406.52
06-Jan-20 1576.85 1573.10, 1198.09 1197.29 & 1408.44 1406.51
03-Jan-20 1547.40 1548.75, 1182.37 1184.48 & 1389.57 1387.99
02-Jan-20 1520.55 1527.10, 1151.36 1161.51 & 1358.46 1366.91
31-Dec-19  1523.00,                1157.78 & 1358.06
30-Dec-19  1511.50 1514.75,  1152.37 1152.57 & 1350.22  1351.91
27-Dec-19  1510.60  1511.50, 1156.36 1152.67 & 1356.37  1353.85
24-Dec-19  1490.85                  1152.58 & 1345.94
23-Dec-19  1483.95  1482.10, 1141.90 1133.95 & 1338.97 1334.35
20-Dec-19  1476.90  1479.00, 1132.19 1132.33 & 1328.20 1327.55


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Mark O'Byrne

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