FxWirePro: Gold trades higher on strong fear factor, good to buy on dips
Gold has jumped almost $15 from yesterday low on increasing market’s safety concerns. The yellow metal formed a minor bottom at $1306.95 on Feb 8th 2018 and minor weakness only below that level. The commodity breaks the …
Gold has jumped almost $15 from yesterday low on increasing market’s safety concerns. The yellow metal formed a minor bottom at $1306.95 on Feb 8th 2018 and minor weakness only below that level. The commodity breaks the major resistance of $1334.50 (20- day MA) in Asian session. It is current trading around $1334.31.
The yellow metal recovery was mainly due to increase in volatility of global equity markets. VIX indicator which is considered fear index or fear gauge. VIX rose almost more than 180% from 18 to 50.2 on two trading days (Feb 5th and 6th 2018). So due to high increase in volatility in stock market investors are going for safe haven products like gold.
On the lower side, any break below $1330 (23.6% fibo) will drag the gold down till $1324 (7- day MA)/$1320. Bearish continuation only if it breaks below $1305 level.
The near term resistance is around $1335 (20- day MA) and any close above will take the commodity till $1340/$1344 (61.8% Fibo).
It is good to buy on dips around $1325-27 with SL around $1320 for the TP of $1344.
