Friday, October 27, 2017

Catalonia Independence vote drives up gold prices following two days of declines from U.S. and European data

After two days of severe declines in the gold price which saw the precious metal fall below its 100 day moving average, the metal regained some ground on Oct. 27 following Catalonia's defiance of Madrid's threats and their vote to declare independence from the Spanish state.

Gold edged higher on Friday, reversing earlier losses after the Catalonian parliament's independence declaration from Spain led investors to seek safety from political upheaval.  
Catalonia's declaration was in defiance of the Madrid government, which was preparing to impose direct rule over the region. 
Bullion is often used as a safe haven in times of geopolitical and economic uncertainty, while riskier assets such as equities are generally sold off. - Reuters
In the short term gold will probably remain below its important 50, 100, and 200 day moving averages, especially as the U.S. dollar has exploded back above 94 on the index.  But more importantly will be to see if gold can hold above the support levels of around $1256, otherwise if it falls through that level it could very easily test $1200, or even decline to $1180 per ounce.

2 comments:

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