Gold Jumps To Highest In 6 Years at $1,436 – Safe Haven Demand As Rising Risks

June 25, 2019

Gold surged over $1,436/oz this morning, it’s highest level in almost six years as an escalation of US sanctions on Iran added to heightened geopolitical uncertainty and uncertainty in global markets.

Market participants are also concerned about the G-20 summit this weekend where it is hoped that President Donald Trump and China’s Premier Xi Jinping will meet to discuss the deepening trade war. 
Gold has closed above $1400 for first time since 2013 as investors diversify into safe haven gold to hedge the growing global risks including the risk of much looser monetary policies again and of zero percent and negative interest rates.

The Fed and ECB have suggested there may be interest rate cuts and other central banks also pivoted to a more dovish position. Investors have responded by buying gold bullion coins and bars, allocating funds into gold exchange-traded funds and greatly adding to net long positions in US gold futures and options.

The outlook for gold is very positive in the coming months, however we would be concerned that this rally may have over extended itself. It may be vulnerable to a correction in the short term, specifically in the next few days prior to month end.

We would like to see a monthly close above $1,400 at the end of this week which marks the end of June. That would be very bullish from technical perspective and would likely propel gold even higher next week. A correction in the short term may mean that a slightly longer period of consolidation is needed prior to moving to higher levels and moving to test the $1,500/oz level.

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Mark O'Byrne is executive and research director of www.GoldCore.com which he founded in 2003. GoldCore have become one of the leading gold brokers in the world and have over 4,000 clients in over 40 countries and with over $200 million in assets under management and storage.We offer mass affluent, HNW, UHNW and institutional investors including family offices, gold, silver, platinum and palladium bullion in London, Zurich, Singapore, Hong Kong, Dubai and Perth. 

One cubic foot of gold weighs more than half a ton (1,306 pounds).