Gold jumped to a 7-week high during Asian trading hours this morning as the USD continued its recent decline, itself hitting an 8-month low following slower-than-expected Q1 US GDP growth.
Spot gold is currently trading at 1277.27, peaking at a 7-week high of over 1280 per ounce, up over $10 from Thursday’s close. Trading has ranged between $1,265.10 & 1,280.90 so far today.
With the dollar testing recent lows again, gold prices are trying higher as investors are looking for a safe haven with high volatility being seen in a lot of other products.
The charts look bullish and the medium-term outlook remains positive, investor sentiment has certainly become more bullish for precious metals over the last couple of months.
The only concern would be that the funds will already be long and how long they are may have a bearing as to when they may start liquidating their positions and realising some profits. This will obviously put some downward pressure on the prices of precious metals. Pullbacks should therefore be expected but dips should be well supported and possibly be seen as reasonable buying opportunities.
The US dollar index sank to eight-month low of 93.43 today – down 0.35% from Thursday’s close – US Q1 GDP figures announced yesterday showed a 0.5% annual rate growth – its slowest pace since Q1 2014 & below the 0.7% consensus estimate. This could indicate continued USD weakness and hence possible further upside for these perceived safe haven asset classes.