Gold drifts lower from its year highs

As tensions cool in the Black Sea, risk-averse traders have eased their exposure to gold.

Last week’s rally in gold, during the run up to the Crimean referendum, had seen it add $52 to its peak. With tensions seeming to ease, or at least the possibility of military action becoming less threatening, the safe-haven status of the precious metal has become less alluring.

Today’s speech by Russian president Vladimir Putin confirmed the nation had welcomed Crimea into its family. In doing so, it has taken another step to ensuring this becomes a permanent state of affairs. The ball is now in the court of the EU and US; how far this escalates is up to them.

Over the last month, gold has found some support around the $1340 level. With issues in the Black Sea unlikely to be resolved in the near future, there could still be periods of further uncertainty where the attractiveness of gold’s status will rekindle investors interest.

In the natural ebb and flow of price movements, it is not too surprising that, following gold's run higher, we have seen a correction in the price. The $1400 level will no doubt remain a psychological barrier, but not necessarily one that can’t be broken. Any close below $1340 might tempt us to reassess the chances of this run being extended.

Spot gold chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.