Gold regaining its glitter as plunge in Crude Oil prices

UNITED STATES June 27 2017 10:05 AM
NEW YORK (Scrap Register): FXTM research analyst Lukman Otunuga said that gold is glittery again, boosted by a recent plunge in crude oil prices that weighed on global sentiment and soured risk appetite. 

“A weakening dollar coupled with mixed messages from policymakers on U.S. rate-hike timings supported the metal further as prices lurched towards $1,258 during Friday’s trading session,” said Otunuga.

With the zero-yielding metal notoriously known for being dictated by U.S. rate-hike expectations, there is a possibility of gold venturing higher if speculations of the Federal Reserve taking action this year decline. 

Due to Brexit developments, political risk in Washington and oil’s oversupply woes stimulating risk aversion, safe-haven assets are likely to remain supported moving forward.

Around 8 a.m. EDT, spot gold was $7.25 higher to $1,257.35 an ounce. On the daily charts, gold is trading within a bullish channel, and there is a visible reluctance to break below $1,240, the analyst added. 

A decisive breakout and daily close above $1,260 could bring bulls back into the game.