Gold bounces on return of stock market volatility

January 14, 2016

The price of gold received a lift on Wednesday afternoon as volatility returned to European and US stock markets. Earlier this week, the yellow metal had fallen from recent highs as stocks regained a measure of stability after global equity markets dropped precipitously during the first trading week of the year.

Traditionally, gold has been perceived as a safe haven asset that investors turn to during times of market turmoil. While this correlation has often failed to materialize in recent times, last week’s rise in gold appeared to be a direct result of large drops in global stocks.

Late last week, this rise in the price of gold reached a two-month high of $1112 just a few weeks after forming a bottoming pattern from December’s multi-year lows around the $1050 support level. The surge broke out above a downward sloping trend line that formed the upper border of the bottoming pattern, as well as the key 50-day moving average and the $1080 resistance level.

The stabilization of the equity markets in the first part of this week has subsequently brought the price of gold back down to the $1080 level, now as support, before Wednesday afternoon’s noted bounce.

With stock market volatility not likely over yet, gold may well have significant room to rise from its current position just off its long-term lows. Any sustained breakout above the $1100 level could see a partial recovery for the precious metal, with key upside resistance targets at $1140 followed by $1170.

Publication source
FOREX.com information  FOREX.com reviews

January 20, 2017
Advance in inflation across the Eurozone
Euro holds gains against the US Dollar ahead of the ECB rate decision, as majority of economists expect no major updates in the policy, while investors will be taking stock of Draghi rhetoric’s to foresee the timeframe of the next big move by the policymakers...
January 20, 2017
US oil inventory draw gave a temporally support for oil prices
Oil prices remained in red figures after Wednesday's bearish acceleration. Brent a little changed on the day and remained prone to more weakness on Thursday. The benchmark stayed neutral around 54.50 dollars per barrel flirting with the level during the European session...
January 20, 2017
Pound gives up gains
The British pound has pulled back sharply today after making its biggest 1day gain in nearly 20 years’ yesterday, as fears once again crept in about where Brexit will lead to...

OANDA Rating
Larson&Holz IT Ltd Rating
OctaFX Rating
FBS Rating
Vantage FX Rating
FXCM Rating

Porter Finance Rating
TropicalTrade Rating
First Binary Option Service Rating
99Binary Rating
24option Rating
Empire Option Rating