Gold glows as safe-haven beacon

Collapsing equity markets and tumbling emerging-market currencies have increased the appeal of the precious metal.

Thursday’s equity market fall is looking a little more serious, as the first half of Friday’s trading has seen little appetite from the buy-on-dip trader. At the same time as this weakness was afflicting the equity markets, we have seen a squeeze on a number of emerging market currencies. On the peripheries of Europe, the Turkish lira has been hit hard over the week, and even the intervention of the central bank was only enough to slow down the process for a limited time yesterday. This squeeze has also throttled the Argentinian peso, which was forced down to a twelve-year low.

The misfortune of others tends to be to gold’s benefit, and the fortuitous timing of these equity market and currency issues has increased the metal’s allure. Couple this increased demand for gold’s perceived security with the technical picture, and we could be set for a squeeze higher in the spot market.

A close above $1268 would put the bias on the upside, with the completion of an inverse head-and-shoulders pattern and an increased possibility of a retest of the $1300 levels. Above $1300, tougher tests will no doubt come for those hoping to see higher levels.

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.