Gold hit $4,550 early in Monday’s European session, as traders came in to take advantage of its recent selloff. Just under a fortnight ago, support gave way at $5,000 to begin a move which saw gold plunge to $4,100 this time last week.
Since then, it has made a jagged recovery, clawing its way back above $4,400. This should now be considered gold’s first significant line of support on any subsequent pullback.
Source: TN Trader
Investors increasingly expect major central banks to adopt more hawkish policy stances as energy-driven inflation pressures continue to build. These concerns intensified over the weekend after it was suggested that US troops could attempt to seize Kharg Island and thereby take control of Iran’s oil exports.
The conflict is also raising fears of disruption by Yemen’s Houthis of the route through the Bab el-Mandeb Strait. This would add to supply strains given the effective closure of the Strait of Hormuz.
