On Tuesday I mentioned that gold had seen a death cross and might be set for a rebound. Courtesy of today’s speech from European Central Bank president Mario Draghi, the precious metal has received a boost and increased the chances of a rally up to $1280.
The fundamental picture for gold has changed little in the last week but with Vladimir Putin, Barak Obama and all the European heads of state going from the Brussels G7 meeting over to France for D-Day services, there is the possibility for change to the current Ukraine Russian standoff.
Equity and commodity markets had been hopeful that we would receive stimulus from both the eurozone and Chinese regions. Following today’s speech from Mario Draghi we have received the first half of that, and it will be interesting to see if or when the Chinese decide to follow suit.
For the time being the $1240 level offers gold support and a bounce back to $1280 could be achieved however, a break above this level would be difficult without further stimulus.