Gold moves above 200-day average after US airstrike on Syria

UNITED STATES April 07 2017 5:34 PM

NEW YORK (Scrap Register): Gold moved above its 200-day average and hit a five-month high of $1,269.40 an ounce Friday after news that the U.S military launched an airstrike on Syria, souring risk appetite, according to analysts. 

“With risk aversion set to heighten as markets ponder over the ramifications of the U.S airstrike, gold and other safe-haven assets may receive a solid boost,” said FXTM research analyst Lukman Otunuga. 

“While there is a possibility of a positive nonfarm payrolls report pressuring gold prices, the downside shocks may be limited by the jitters. From a technical standpoint, bulls need a solid daily close above $1,260 for a further incline higher towards $1,300,” Otunuga added.

Commerzbank analysts pointed out that gold’s rally after the U.S.-Syria news means the yellow metal has risen above the technically important 200-day moving average after battling to do so for days, which could lend further buoyancy to the gold price if it were to establish a foothold above this threshold.

The geopolitical risks that were made clear to market participants by today’s U.S. military action have resulted in marked buying interest in gold as a safe haven, Commerzbank added.

Gold was trading $10.90 higher at $1,262.75 an ounce as of 7:44 a.m. EDT. The 200-day average stood at $1,257.30.