Gold surges 4% on dollar weakness

While the extension of the US Federal Reserve’s current quantitative easing programme could eventually create an inflationary environment, this is clearly not a consideration in the near term.

The 4% rise in gold can instead be attributed to the dollar sell-off. The greenback has touched upon seven-month lows against a basket of currencies in the aftermath of the ‘surprise’ Fed inaction.

Having bounced from recent lows of $1292, the surge which has brought us back to test the lower band of the bullish channel from the $1080 lows is one to watch. Any move back into this channel will see the $1415 level targeted once again, and a meaningful close above it has the potential to create a more sustained upside move.

Should the gold price fall below the $1350 mark we may be looking at a mere correction rather than a reversal. Any drop below the recent lows should put additional downside pressure on the yellow metal.

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.