Analysis: Weekly GOLD - XAUUSD 13.01.2020
13 January

Analysis: Weekly GOLD - XAUUSD 13.01.2020



Market Overview Gold closed at $1562.34 per ounce on Friday with a 0.64% gain against Thursday’s closing price. Gold prices reversed bullish gains as risk-off appetites abated over de-escalating tensions in the Middle East. The precious metal illustrated for a roller-coaster session as geopolitical challenges took centre stage. Gold as a safe haven asset surged rapidly (2020-Highs: 1616.00) as investors sought safe haven cover over tumultuous market conditions. The yellow metal has illustrated for a brilliant start to 2020 (up >5.1%) as traders deliberate US dollar weakness and intense geopolitical uncertainties for the current term.


Market Updates: Geopolitical risks enact sharp volatility on safe haven assets Geopolitical concerns took the centre stage as US-Iran tensions surged over a US missile strike on Iran’s top military commander. Gold prices spiked dramatically as investors sought safe haven cover over heightened tensions in the Middle East. The safe haven asset experienced sharp intraday volatility (Price movement: $50-$60) as market expectations shift over intense headline trades. The precious metal though easing off previous-highs (2020) over de-escalating tensions (US-Iran) will remain of key importance, as markets stay cautious over geopolitical happenings in the current term.


Daily Market Assessment De-escalating tensions between the United States and Iran has alleviated market fears on further conflict in the Middle East. Traders will now fixate over the much-anticipated ‘Phase One’ US-China trade deal (15th January 2020). A continuation of the negative trend scenario from a technical perspective will see gold prices test key trend line support of 1515.00 in the current term. This Week’s Outlook: Mildly Bearish (1515 – 1565)


Mid-Term Market Assessment Heightened geopolitical tensions and US dollar weakness has created supportive conditions for the non-interest bearing asset (Jan 2020). Gold prices have illustrated for marked volatility as market expectations shift over headline trading activities. 1Q 2020 Outlook – $1485 – 1525


Gold prices whipsawed as market forces struggled to retain bullish gains above key psychological level of 1600.00. Technical patterns have illustrated for a strong bullish rejection as price levels declined by more than 4.5% (2020- Highs: 1616.00). Failure to hold price levels above 1541.00 will trigger strong negative influences towards key trend line support of 1515.00. On the flip side, gold prices must break above 1580.00 to shake off sharp bearish pressures in the near term.


Trading Range: Key Resistance Level: 1580.00 & 1616.00 Key Support Level: 1515.00 & 1480.00


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