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MENAFN- Daily Forex)
- Gold has exploded to the upside yet again during the trading session on Thursday as it looks like we are getting ready to take out the all-time highs.
- That's not a huge surprise: the only thing that's a surprise at this point in time is how quickly it happened.
- Remember, gold got a boost during the announcement that tariffs were going to be paused for 90 days, but they were already rallying before that.
Most of what you've seen recently has been forced liquidation by hedge funds who were trying to cover losses in other markets. Remember, they have a leveraged book. So if they find themselves in serious trouble, for example, with the NASDAQ 100 or maybe something along the lines of levered Tesla or Nvidia positions, and sooner or later, they are forced to pay more margin and typically, what they'll do is they will sell a market that's done very well to collect some of those profits and send them to their prime dealer. The $3,000 level has offered support. The 50-day EMA as well, just below, has offered support and at this point in time, it looks like we are ready to go screaming higher again.
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I don't expect this type of momentum to continue, but I do think that the uptrend is most certainly going to be looking at the bullish flag underneath, we had a measured move of $3,300 and there's nothing on the chart that suggests that we can't get there. In fact, I do think we will probably go higher than that. Gold is screaming higher for a multitude of reasons, not just the fact that there's a lot of financial stress out there, the simple fact that there's a lot of geopolitical problems, and of course it looks like the global economy may slow down in various places. So, all this leads for a continuation of the trend that we've seen for the better part of a year and a half now.
EURUSD Chart by TradingView
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