Gold Flirts With 1,550, Where Is Gold’s Top? Silver at 18.50Gold is heading to close its fifth straight week with gains. Just in August, XAU/USD advanced over 9% in a month that is heading to become the biggest monthly increase since February, and it seems the rally won’t stop anytime soon.
An impending recession.
Hello FX Emperors, Wednesday started fiercely as the market is watching how yield curves are inverting further, signaling an “impending recession,” as a CNBC article said today.
Also, Goldman Sachs is forecasting that Germany will publish another negative period in the third quarter, and UK’s Prime Minister asked Queen Elizabeth II to suspend UK Parliament in an attempt to avoid a no-deal Brexit.
Would you stop our politicians, your highness? Oh wait! I am one of them…
Gold and silver are extending, even more, their rallies and now the market is asking itself where the top for metals is? According to George Milling-Stanley, Chief Gold Strategist at State Street Global Advisors, he is watching a 2011-style gold market.
Gold extends advances and tests the 1,550 area
Gold prices are trading positive on Wednesday as investors are digesting fears about recessions in both the United States and Germany. XAU/USD jumped to test the 1,550 area, but it was rejected.
Then, the metal was sent down to current levels around 1,545, which is near to the opening price. Technical conditions suggest a short term period of consolidation, but the bigger picture remains pretty bullish.
To the upside, first resistance is at 1,550, above there, please check for 1,555 area, August 25 high. Tp the downside, 1,530 is currently supporting the metal, below there, 1,525 is critical support before the 1,510 level.
Where is gold’s top?
Gold is heading to close its fifth straight week with gains. Just in August, XAU/USD advanced over 9% in a month that is heading to become the biggest monthly increase since February, and it seems the rally won’t stop anytime soon.
Chief Gold Strategist at State Street Global Advisors George Milling-Stanley affirmed in an interview with Kitco News and TheStreet, that “gold could experience 2011 all over again.”
Milling-Stanley highlights the inflows coming to the metal. “If you remember the last time we had significant speculative money coming into the market was as long ago as 2011, and speculative money flows drove the price up $500 in just 9 months. I could easily see something like that happening again.”
The analyst remarked that gold-backed ETFs have seen inflows of more than $5 billion, “with three and a half of that going into GLD alone, that I find very encouraging.”
Between February and August 2011, XAU/USD rallied an astonishing 45% from 1,330 to 1,910, near its all-time high.
Silver extends gains
Silver is trading positive for the fourth day in a row. Investors are taking the metal as an alternative from an already high gold. On Wednesday, XAG/USD jumped to test the 18.50 area, its highest level since April 17, 2017.
Now, the pair is trading in consolidation mode around 18.40, which is 1.05% positive in the day. Technical studies suggest more room for the upside, but the bears seem to be defending the 18.50 actively.
To the upside, the next resistance is at 18.70, then, the psychological 19.00, and 19.75. As for the downside, 18.30 is currently supporting the upside, so a break below that number would open the door for a test of the 18.10 area.