NEW YORK, N.Y. – Gold remained unyielding today even though oil gave up some of its recent gains. Asian shares appear to have rebounded as well following Wall Street’s modest gains on Monday.
The past two days saw gold prices rising by as much as 2.4%. This safe-haven asset is currently priced at $1,600 and ounce. It’s the highest the metal has reached since 2013.
The geopolitical tension in the Middle East pushed investors to this precious metal. While the situation remains volatile, analysts are predicting that the price of gold would eventually settle. But right now, its experiencing considerable intraday levels.
Sentiment wise, any movement is always in conjunction with long retail majority and Commitment of Traders (CoT) bigger speculative traders. CoT bias had advanced to a long 88% on a rise in long positions by 17,310 lots and an instant decrease in shorts by 4,963 lots.
The United States committing more troops to the Middle East as the region and markets wait for Iran’s expected retaliation has prompted has caused gold and other safe-haven assets to rally.
Analysts from Citigroup noted than the increase in geopolitical risks across the Middle East would bolster a stronger environment for gold prices this winter. Prices for the yellow metal could peak at $1,625 this quarter. But depending on how the US-Iran issue plays out, gold prices could settle between $1,500 and $1,600.
Gold investors have been focused on the region since a US-led air strike killed Iran’s General Qassem Soleimani last week. The attack caused Iran to promise severe retaliation and prompted prices of oil and gold to shoot up.
The US has also deployed a three-ship amphibious contingent in the Persian Gulf area. The move came on the heels of around 3,500 soldiers sent to Kuwait last week.
Goldman Sachs recently stated that gold was a better option than oil in this particular crisis. Citi experts noted that gold wrapped up 2019 on a bullish move. Now recent events have further pushed institutional and retail inflows across ETFs, options, and bullion futures.
The Citigroup cautioned traders on the challenges of trading the metal simply because of what’s happening in the Middle East. But they also acknowledged that there are “bullish fundamental tailwinds.”
There’s virtually no change in spot gold trading. It remains at $1,565.55 per ounce in London. It had an intraday drop of 0.7% but has already recovered. It is lower than Monday’s high of $1,588.13, which is the highest price it has reached since 2013.