Euro, Iran and Asian New Year Buying Fuels Gold
Gold’s fifth day of price rises is the longest rally we’ve seen in two months. Concerns about the solvency of European banks and sovereigns is overcoming the ‘risk on’ appetite of late 2011 and early 2012. The euro has fallen to 1.2840 USD and to €1,256/oz.
Growing tensions with Iran including the European Union’s preliminary agreement to ban Iranian oil, will fuel gold’s safe haven status for investors.
Gold is trying to consolidate above psychological levels of $1,600/oz, £1,000 and €1,200/oz. The 200 day moving average is $1,631.60 which remains resistance. The intraday high hit $1,624.66, was gold’s highest price since December 21.
We expect gold demand to pick up ahead of the Chinese Lunar New Year, The Year of the Dragon, which begins on January 23.