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The gold prices are on the rise due to the escalation of geopolitical risks

Jan 3 2020, 01:16 PM (+06) | Fortfs.com

During the Friday morning trading session gold prices have risen by 1% amid reports of the death of Iranian general Kassem Suleimani as a result of US airstrikes. Iranian supreme leader Ali Khamenei announced the impending of “harsh revenge on the criminals” who killed General Suleimani. Furthermore, Iranian Defense Minister Amir Khatami made similar statements. Investors fear a serious aggravation of the conflict between the US and Iran and are actively buying defensive assets (gold, Japanese yen, etc.). Some experts do not exclude direct military confrontation between the two countries.

 

Due to the aforementioned aggravation of geopolitical risks, today we can expect further development of the upward movement of gold prices. Also, the PMI date on the US manufacturing sector published by the ISM can further influence the gold prices.

 

Regarding the graph, there was a breakdown of resistance at the level of 1530.00. This is a signal of further development of the bull trend with a target at the level of 1555.00.

 

Resistance Levels: 1555.00, 1565.00, 1575.00;

 

Support Levels: 1537.00, 1530.00, 1515.00.

 

The main scenario - an increase towards 1555.00.

 

An alternative scenario - a breakdown of support at 1537.00 and a decline towards 1530.00.

 

The fundamental outlook is positive. A strong bull trend is developing on the chart, so within the daily framework we give preference longs. Entry points should be considered at the level of 1537.00

 

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