Gold went on quite a journey yesterday. Early in the session, it sliced through support at $4,400 to hit a four-week low under $4,370. At that stage, it looked as if the break of support would encourage further selling. But gold managed a tentative recovery, possibly helped by a modest pullback in the US dollar. This helped it to push back above $4,400, and from there it just soared.
By late afternoon, the precious metal was trading above $4,500, and it has managed to hold above here so far today. Sentiment concerning a possible breakthrough in US/Iranian negotiations to end the war has improved. This led to a selloff in the US dollar, which has helped support the price of gold. This move was also reinforced by US data, which reduced the probability of a US rate hike this year.
Source: TN Trader
Investors must now position themselves ahead of the weekend, unsure if developments will be positive or negative. But either way, gold’s rebound after breaking key support so easily must give some encouragement to the bulls. Yet it remains to be seen if it can hold $4,500 on any pullback.
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