Gold price surged to new record high at $4600 in early trading on Monday, as the latest clash between President Trump’s administration and Fed Chair Powell, on a criminal probe to Fed chief, which raises big question mark above the independence of the US central bank, further fueled uncertainty, as political crisis in the US deepens.
Situation in Iran remains very fragile and marks another key driver of the latest strong rise of demand for safe haven assets with US threats to attack the country and Iran expressing readiness for strong response, boosted migration into safety.
Gold opened with slight gap higher on Monday and easily broke through previous all-time peak, to crack psychological $4600 barrier.
Fresh rally rose again above the upper boundary line of the bull-channel (from late October correction low) that generated fresh bullish signal, as the price made another record fast move from one to another round-figure levels.
However, $4600 resistance is likely to cause headwinds as daily studies are overbought, but limited consolidation with shallow dips to provide fresh levels to re-enter bullish market.
Former top and bull-channel trendline offer initial but solid support at $4550, with extended dips to find firm ground at $4500 zone and keep bulls intact.
Sustained break of $4600 to expose projected targets at $4630; $4687 and $4700 initially, though stronger acceleration cannot be ruled out as all fundamental factors remain very favorable, with focus on highly sensitive geopolitical situation.
In such environment, the yellow metal is likely to extend steep rally which commenced in August, after three month consolidation (May/June/July) which was expressed by three tight monthly Doji candles.
Res: 4630; 4687; 4700; 4750.
Sup: 4550; 4500; 4452; 4429.
