Gold hits $2,640 and bulls eyeing $2,700 – Mid-East tensions loom
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Gold reaches new record high $2640, room for $2680-$2700.
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Mid east tensions keep rising as Israel launches intense aerial strike on Lebanon.
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Fears of a wider escalation cause spike in safe haven demand for Gold.
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Markets remain optimistic of more rate cuts this year.
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Chinese central bank increases Gold purchases.
As Israel launches its one of the fiercest aerial strikes on Lebanon, risk on sentiments take a toll and markets rush to safety resulting in spike in safe haven demand for Gold which reached new record high $2640
Apart from this, news of Chinese central bank buying gold even at record high prices adds more fuel to the prevailing bullish rally.
Federal reserve cutting key interest rate by 50 BPS also makes markets optimistic of more 50 BPS cut this year which makeS Gold more attractive than treasury yields.
Upcoming presidential elections in the United States causing rising bets on possible uncertainities about micro and macro sentiments.
At the moment, immediate trend in Gold stays bullish and way is open to further gains potentially reaching $2660-$2680 and even $2700 in near term.
All the same, the Relative Strength Index on Daily, Weekly and particularly on Monthly time frame is showing an overbought scenario which urges caution of a possible pullback from record high.
An eventual profit booking from retail segments may witness a revisit to psychological handle $2600 followed by $2575-$2525 in short term.
Markets have a unique charachter of trapping retail traders the wrong way, more often than not.
A healthy pullback is also good for momentum accumulation as Gold does have long term bullish targets of $3000 and beyond.
Value buyers may find it an interesting retracement to add long positions at a better bargain.
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