Gold prices rose in early Thursday trading, extending what has so far been a very positive week for the precious metal, with gains exceeding 5.7%. Investors have been buying gold as a safe-haven asset, aware that it tends to perform well in times of uncertainty — and there is plenty of that currently dominating the headlines. The ongoing US government shutdown is preventing the release of economic data, forcing traders to navigate, to some extent, in the dark, while the recent flare-up in trade tensions between the US and China remains a major cause for concern, casting doubt on the global economy’s growth prospects. At the same time, the Federal Reserve is increasingly expected to maintain a dovish stance in the medium to long term, creating a headwind for the US dollar — which supports gold prices due to the inverse correlation between the two assets. Against this backdrop, and with traders, buoyed by recent gains, overlooking technical signals that point to overbought conditions, there may still be scope for further price increases.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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