Fundamental Undertones Strengthen Gold’s Bullish Market Sentiment

Today gold continues its upward climb trading to a high of $1543.30 before settling just off of that price point at $1539.20 with respectable gains of $7.70 (+0.50%). Since gold prices hit a low of $1491.30 on Wednesday, September 18, traders have witnessed solid daily gains with consecutive higher highs, and higher lows.

Of key importance is the current trade war between the United States and China which has been shaping gold’s bullish sentiment for quite some time recent events and hotspots seem to add energy to the current rally firmly in place.

The trade war has had the net effect of slowing global economic growth, and in turn that slow economic growth is forcing the hand of central banks worldwide as they return to a much more accommodative monetary policy by lowering interest rates, and adding liquidity to the market.

Another fundamental event that remains a wildcard is Brexit. The fact of the matter is traders and market participants are wondering if Britain can leave the European Union with an amicable solution for both parties. Currently both the European Union and Britain have been unable to resolve the issues.

In an article penned by Myra P. Saefong and William Watts, they acknowledged the growing risks based upon Brexit, “the U.K. Brexit drama took another twist on Tuesday after the country’s top court ruled that Prime Minister Boris Johnson’s decision to suspend Parliament was illegal. It’s unclear how damaging the ruling will be for Johnson and his government’s effort to take Britain out of the European Union by Oct. 31 with or without an exit agreement with the European Union.”

Last week’s attack on a Saudi Arabian oil production facility by Iranian backed rebels continues to add uncertainty in regards to a response by either the Saudis or the United States.

Today President Trump spoke at the United Nation’s General assembly and criticized China, along with a stern hard line stance on Iran.

According to MarketWatch, “Gold prices logged their highest finish in nearly three weeks Tuesday, after President Donald Trump criticized China and took a hardline stance on Iran during his speech at the United Nations General Assembly, pressuring U.S. stocks and boosting the metal’s haven appeal.”

Based upon the fundamentals and geopolitical flashpoints which have created a massive appeal for safe haven assets, it seems highly likely that these issues will get worse before they are resolved, and that will continue to provide market participants with a solid reason to continue the extreme bullish sentiment currently seen in gold.

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Wishing you as always, good trading,