Gold Price Flirts with $1300 And Trades to a New Yearly High

New York (April 22)  For market participants who invest or trade gold, it has been an interesting week. Although gold prices traded to a higher high and a lower low than the previous week, the net change overall was a fractional loss of approximately one dollar.

The week started off with gold prices flirting with $1300 as gold pricing surged intra-day to $1297. Gold was unable to hold those gains, and by the close had traded back to $1284. Wednesday contained the single largest price decline this week, trading to the weekly low at $1274 before recovering to $1280, a loss of $10 on the day.

The geopolitical turmoil which existed last week seems to have subsided, at least in the short term. Since North Korea continues to ratchet up its rhetoric aggressively, China has entered the arena and placed some pressure on the North Koreans to curtail their nuclear proliferation plans. This marked a critical change in Chinese global policies and allowed market participants to focus on other events.

As reported by MarketWatch, “I think the big rally last week off $1,200 priced in a lot of the current political uncertainties,” Colin Cieszynski, chief market strategist at CMC Markets, told MarketWatch. “There hasn’t been anything new other than the attack in France to change the political outlook over the last 48 hours and even then, the election result is a toss-up.”

This week both Britain and France moved to the forefront of geopolitical events that could affect precious metal pricing next week. On Sunday French citizens will go to the polls, and if no candidate gains more than 50%, there will be a final vote which will take place on May 7th.

According to Myra Saefong and William Watts of MarketWatch, “The vote is the latest test of nationalist sentiment following last year’s vote by the U.K. to leave the European Union and Donald Trump’s U.S. election victory last November. A strong showing by anti-European Union candidates, right-wing National Front Leader Marine Le Pen or left-wing candidate Jean-Luc Mélenchon, could spark a near-term global scramble for havens like gold, analysts said.”

The Technical Indicators Speak for Themselves

Based upon our current technical studies, it is quite evident that $1300 is the current minor level of resistance in gold. While it seems highly probable that gold will breach 1300 over the next couple of weeks, there is major resistance at $1320. Our studies also indicate that there is a level of minor support at 1278, as well as major support for gold pricing at 1261.

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Source: KitcoNews