Gold Up on Safe-Haven Demand

09 August 2017 6:41:37 AM

By: DailyForex.com

Gold prices ended a choppy, two-sided trading session higher yesterday as tensions between the U.S. and North Korea escalated. XAU/USD traded as high as $1267.12 an ounce after a sell-off in Japanese shares prompted investors to seek shelter in safe-haven assets. Gold usually benefits temporarily from geopolitical risks but a strong correction in equities markets could be the missing catalyst that gold needs to break resistance in the $1274-$1271 zone.

XAU/USD is still trading above the Ichimoku clouds on the weekly and the daily charts. We have positively aligned Tenkan-Sen (nine-period moving average, red line) and Kijun-Sen (twenty six-period moving average, green line) lines on both time frames, along with Chikou Span/price crosses in the same direction. All these suggest that the bulls have the medium-term technical advantage.

XAUUSD Daily

 

At this point, keep an eye on the top of the 4-hourly cloud, which is confluent with the upper trend line of the descending channel. If the market anchors somewhere beyond 1264, then the next stop will be 1274/1. Closing beyond 1274 on a daily basis makes me think that the market is on its way to 1282/0. However, a failure to break out of the channel would weigh on the market. In that case, XAU/USD may test 1258.85 (the bottom of the cloud on H4 chart) or even 1255/3. The bears have to capture that strategic camp to make an assult on the 1250-1247.89 area.

XAUUSD H4

Alp Kocak has been trading Forex since 2003. He writes technical analysis based on Japanese candlesticks and Ichimoku Kinko Hyo.

DailyForex Newsletter
0 User Reviews

Registration is required to ensure the security of our users. Login via Facebook to share your comment with your friends, or register for DailyForex to post comments quickly and safely whenever you have something to say.

Log in | Create a DailyForex.com Account Now