Spot gold prices touched an all-time high in early Wednesday trading, breaching the $4,200 level. Demand for the precious metal remains robust, underpinned by strong safe-haven flows and a growing perception that sentiment within the Federal Reserve is turning increasingly dovish. Concerned investors continue to flock to gold as uncertainty intensifies amid the ongoing US government shutdown, which bodes poorly for the economic outlook and delays the release of key data. The rally is also being fuelled by the recent flare-up in trade tensions between the US and China, which has revived fears of an all-out trade war between the world’s two largest economies. In the absence of fresh economic indicators, traders are closely monitoring public statements from senior Fed officials, which continue to pave the way for further rate cuts — a dynamic that remains supportive for the non-yielding precious metal. Against this backdrop, and with speculative trading activity on the rise, the path of least resistance remains to the upside, with any dips likely to be viewed as buying opportunities.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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