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Daily market commentary: Gold is continuing its massive rally



Daily Market analysis

ActivTrades’ Market Analysts have prepared for LeapRate their daily commentary on traditional markets for January 6, 2020. This is not a trading advice. See details below:

FOREX

The dollar and the euro are staging a modest recovery to the yen in early Monday trading. The Japanese currency, traditionally seen as a safe haven, recorded gains in the five previous sessions as a result of the escalation in tensions between the US and Iran feeding off the risk-off mood that prevailed in the aftermath of the assassination of a prominent Iranian General by the Americans. Many feared this situation could lead to an all-out military confrontation between the two countries. That feeling has somewhat subsided and that is why the dollar and the euro are gaining ground against the yen, as it is now believed that Iran’s retaliation may be less extreme than originally feared.

Ricardo Evangelista – Senior Analyst, ActivTrades

GOLD

Gold is continuing its massive rally, driven by the escalation of tensions between the US and Iran. Bullion’s reaction was – once again – strong, with the price climbing as high as $1,587, before slowing down, but further gains are still likely with markets waiting to see the Iranian retaliation (and any further US moves).

From a technical point of view, we should note that the price has broken through the previous six and a half year high, surpassing the key resistance level of $1,550 without any trouble. This highlights the huge gold appetite of investors currently, where we are seeing a switch of liquidity from risk-on assets like equity, to safe haven instruments, such as gold.

Carlo Alberto De Casa – Chief analyst, ActivTrades

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Daily market commentary: Gold is continuing its massive rally

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