Gold prices moved higher as geopolitical risks began to raise its ugly head. Over the weekend, drones bombed several Saudi Arabian oil fields, reducing production by more than 50%. While the Saudi’s expected to bring 33% of the production that came offline back online, the move by Yemenis terrorists, have changed the investment landscape.
Trade gold with FXTM
Gold prices moved higher as geopolitical risks rose, but was unable to push above resistance near the 10-day moving average at 1,509. Support on the yellow metal is seen near the 50-day moving average at 1,476.Short term momentum has turned positive as the fast stochastic generated a crossover buy signal in oversold territory. Currently the fast stochastic is printing a reading of 18, which is well below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum is negative as the MACD histogram is printing in the red with a downward with a flat trajectory which points to consolidation..
The US Points to Iran Raising Geopolitical Tensions
American officials say intelligence indicates that Iran was the staging ground for a debilitating attack on Saudi Arabia’s oil industry. Both countries are not in the process of determining responses. The assessment, comes as President Trump raises the prospect of the US and Saudi Arabia joining forces to launch a retaliatory strike on Iran. Such a move could quickly broaden into a regional conflict. This could generate more volatility in the market and buoy gold prices. With global economies feeling the pinch of the trade tariffs, higher oil prices could generate significant instability in the capital markets.
This article was originally posted on FX Empire
More From FXEMPIRE:
- EUR/USD Price Forecast – Euro breaks down
- Silver Price Forecast – Silver markets gapped higher to kick off the week
- Gold Price Forecast – Gold markets gap higher to kick off the week
- Oil Prices Spike More Than 10%, Equities Move Lower, The FOMC Meets This Week
- S&P 500 Price Forecast – Stock markets gap lower after drone attack
- GBP/JPY Price Forecast – British pound gapped lower against Japanese yen amid chaos