Ricardo Evangelista – Senior Analyst, ActivTrades
The gold price rose on Thursday morning, continuing what has been a very positive week for the precious metal, with gains of over 5.7%.
Investors have bought gold as a safe haven, knowing that it tends to perform well during times of uncertainty – and there’s plenty of that in the headlines right now. The ongoing US government shutdown is preventing the release of economic data, forcing traders to operate somewhat in the dark, while the latest escalation in trade tensions between the US and China continues to cause significant concern and raise doubts about the global economic growth outlook.
More Dovish Fed Supports Gold
At the same time, it is increasingly expected that the US Federal Reserve will maintain a cautious stance in the medium term, which weighs on the US dollar – and, due to the inverse correlation between the two assets, supports the gold price.
Against this backdrop, and given that traders, buoyed by recent gains, are overlooking technical signals indicating overbought conditions, there could still be room for further price increases.
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