Gold prices rose, touching a three-week high in early Thursday trading. The precious metal has gained more than 5% so far this week, supported by a widespread view that the release of key economic data — expected after the end of the US government shutdown — will reveal weaknesses in the American economy and increase the likelihood of another Federal Reserve rate cut in December. This dynamic has weakened the dollar and benefited non-yielding gold. At the same time, the reopening of the US government has generated some optimism in financial markets and is likely to drive gains for riskier assets, such as equities — a scenario that could ultimately limit bullion’s upside potential. Nevertheless, the consolidation of prices above the $4,200 level could suggest that the path of least resistance remains to the upside, with dips continuing to offer buying opportunities.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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