FXOpen
Gold rallied to more than $1300 an ounce as early polls showed more than 50% Britons favoring Britain’s exit from the European Union. The extreme volatility and uncertainty in the financial markets has caused gold rally because of an increased demand for safe heaven investment.
Technical Analysis
As of this writing, the precious metal is being traded near $1300 an ounce. A hurdle may be noted around $1304, the horizontal resistance area ahead of $1315, the swing high of the latest major upside rally and then $1350, the psychological number.
On the downside, the yellow metal is likely to find a support around $1282, the horizontal support level ahead of $1250, the psychological number and then $1200, the confluence of a psychological number as well as the swing low of the latest major downside move as demonstrated in the above daily chart.
Brexit Polls
A series of early referendum results favoring the U.K.’s departure from the European Union battered the British pound Thursday night and into Friday morning, rallied gold and pushed down stock markets in Asia, confounding traders and investors who had stacked up bets on the Remain camp. Then the counting started. A hair’s-breadth win for Remain in Newcastle, in the northeast of England, started to deflate the pound, as did reports of Leave victories in smaller districts. Sunderland, a Labour-leaning port city where anger at the EU runs high, reported a 61.3% Leave tally. The pound slammed down, falling more than 3% in minutes. Gold is expected to touch $1400 levels if Britain leaves the EU.
Trade Idea
Considering the overall fundamental outlook, buying the precious metal on dips appears to be a good strategy in short to medium term.
Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Stay ahead of the market!
Subscribe now to our mailing list and receive the latest market news and insights delivered directly to your inbox.
Latest articles
Sterling Consolidates Ahead of the Bank of England Decision
Sterling is consolidating as markets await the Bank of England’s interest rate decision, while investors’ attention is gradually turning to tomorrow’s meeting of the Bank of Japan. The UK currency is moving cautiously, as markets have largely priced
Analysis of the Volatility Spike on the BTC/USD Chart
Yesterday, the BTC/USD chart saw sharp price swings during the US trading session:
→ first, Bitcoin rose by more than 3%;
→ shortly afterwards, it dropped by over 4%.
The main impulses unfolded within just a few hours and triggered liquidations
The US Dollar Index (DXY) Rebounds from a Two-Month Low
A week ago, we:
→ updated a system of two trend channels;
→ identified signs of selling pressure dominance;
→ outlined a scenario in which price could slide towards the lower boundary of the blue channel, potentially acting as key support.
As the