The yellow metal extends strong rally into third straight day, boosted by expectations of Fed rate cut by the end of the year on slowing inflation, weaker labor sector and the newest crisis in the Middle East that boosts safe-haven demand.
Significant bullish signal can be expected on weekly close above $1346 pivot that would expose 2018 highs at $1365/66 and open way towards key barriers at $1375/82 (2016 high/Fibo 38.2% of longer-term $1923/$1047 fall).
· Bullion takes out the highs for the year and is running stops above $1,350 as price looks to break out to test the highs of last year again. Gold has been on a tear in recent weeks as global central banks grow increasingly dovish amid global trade tensions, which has helped to reestablish the allure in the commodity as a safe haven.
With the break higher here and the backdrop of major central banks starting to send more dovish signals, it's hard to argue that gold's gains will top out near last year's highs around $1,357 to $1,365. If the Fed is going to follow through on rate cuts with more to come, gold will easily stand out as one of the best performers this year.
Safe havens including Gold are on the bids as a recent tussle between the US and Iran over 2 oil tankers’ blast in the Gulf of Oman turns serious. The yellow metal is taking the rounds of $1344 during the initial Asian session on Friday.
Following the blast, the US said it has proofs that Iran was behind the attacks while Reuters recently quoted anonymous official mentioning that the video clip clearly shows Iran’s Revolutionary Guard (IRGC) approaching the vessel and removing the mine.
Adding to the allegations was the UK’s Foreign Minister, Jeremy Hunt that recently confirmed to start their own assessment with the US view of Iran being the hand behind the incident, as per the BBC report.
Other than geopolitics, data-driven weakness of the US Dollar (USD) also seems to help the bullion.
Traders might be interested in the upcoming China data dump and the US retail sales during the later part of the day to determine near-term trade direction.
Technical Analysis
Having cleared $1342 resistance, the yellow metal needs to successful cross the current month high around $1348 in order to aim for April 2018 tops near $1365, failing to which can once again drag the quote to $1320 and then to April 2019 high near $1310.
· Gold is shining bright across the globe this Friday morning with prices trading at lifetime highs in Australian dollar terms.
XAU/AUD or Gold in AUD terms is currently trading at A$ 1,954 per Oz, the highest level on record, having surpassed the previous record high of A$ 1,923.50 on June 12.
Gold has risen to record highs in AUD terms amid growing calls for aggressive Reserve Bank of Australia (RBA) rate cuts. National Bank of Australia revised its forecast for RBA cuts to three from two earlier today.
· Among other precious metals, silver gained 0.2% to $14.94 and platinum rose 0.7% to $813.10.
Palladium climbed 0.2% to $1,449.19 after hitting its highest since April 29 at $1,450.39 earlier in the session.
The auto-catalyst metal has gained 6.6% so far this week and is set post its best week since week ending Sept. 21, 2018.
Reference: FX Street, Forex Live
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