EUR with a recovery | Gold is continuing its rally
The dollar and the euro are staging a modest recovery to the yen in early Monday trading. The Japanese currency, traditionally seen as a safe haven, recorded gains in the five previous sessions as a result of the escalation in tensions between the US and Iran feeding off the risk-off mood that prevailed in the aftermath of the assassination of a prominent Iranian General by the Americans. Many feared this situation could lead to an all-out military confrontation between the two countries. That feeling has somewhat subsided and that is why the dollar and the euro are gaining ground against the yen, as it is now believed that Iran’s retaliation may be less extreme than originally feared.
Ricardo Evangelista – Senior Analyst, ActivTrades
Gold is continuing its massive rally, driven by the escalation of tensions between the US and Iran. Bullion’s reaction was – once again – strong, with the price climbing as high as $1,587, before slowing down, but further gains are still likely with markets waiting to see the Iranian retaliation (and any further US moves).
From a technical point of view, we should note that the price has broken through the previous six and a half year high, surpassing the key resistance level of $1,550 without any trouble. This highlights the huge gold appetite of investors currently, where we are seeing a switch of liquidity from risk-on assets like equity, to safe haven instruments, such as gold.
Carlo Alberto De Casa – Chief analyst, ActivTrades
*The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication. All information has been prepared by ActivTrades PLC (“AT”). The information does not contain a record of AT’s prices or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of futures performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.