Gold price began the new week on a high as the unrest in the Middle East led investors to increasingly seek safety in the conventional safe-haven asset. Earlier in the session, it added onto the gains recorded on Friday when it broke past the one-month resistance level of $5,252. At the time of writing, it was trading at $5,391, up by 2.14%.
The extended gains are in reaction to the US attack on Iran over the weekend, and Iran’s retaliatory wave of missiles on different targets within Israel and the Islamic Gulf. Following the killing of the Iranian Supreme Leader, Ayatollah Ali Khamenei, the government has indicated that it “will not negotiate with the United States”. At the same time, President Trump has stated that the attack will continue until “all the objectives are met‘.
Gold price surges amid investors’ rush to safety
Geopolitical tensions have been a key bullish driver of the gold price multiyear rally. In addition to increased demand from institutions and individual investors,concerns over unrest in different parts of the world have steadily pushed market participants to seek safety in safe-haven assets like precious metals.
Even before the attack on Iran over the weekend, investors were concerned over President Trump’s aggressive foreign policy and his assertions on the US taking over Greenland. The US involvement in Cuba and Venezuela has also contributed to gold price gains.
The bullion has risen by close to a quarter year-to-date despite the plunge recorded in late January. Notably, February marked the seventh consecutive month of gains; its longest winning streak in decades.
Amid the ongoing chaos in the Middle East, gold price has begun the new week on a high; getting on track to hit its fifth straight week in the green. With the renewed momentum, the bulls have a chance to attract enough buyers to retest the all-time high hit in late January at $5,600 an ounce.
Silver price also started the week on its front foot; sustaining its surge above the previously firm resistance zone of $90. At the time of writing, it was trading at its highest level since 30th January at $95.43. Platinum is also at a one-month high at $2,380 an ounce. However, palladium price continued to trade sideways as the bulls lacked enough momentum to retest the one-month high hit in the past week.
GLD ETF technical analysis
On Friday, the GLD gold ETF, which tracks the performance of the bullion, broke past the crucial resistance level at $481 amid heightened geopolitical tensions. Following the US attack on Iran, the derivative may record a bullish gap in Monday’s session. This places its next target at an over one-month high at $495. Beyond that, the entry of more buyers may bolster it to the all-time high hit in January at $509.
At an RSI of 61, GLD gold price has room for further gains before the profit-taking mode kicks in. Besides, it will likely hold steady above the short-term 25-day EMA at $460. On the flip side, a pullback will likely sustain it above the support level at $475.
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