Did you know?
That when markets are threatened, investors turn to gold as a safe haven?
The big news today is gold!
Gold recently rose to near a six-year high to above $1,400, its highest since September 4, 2013.
Here are the top influencers for the dramatic rise in prices:
- Increased tensions between the U.S. and Iran
- The US and China trade war
- The global economic slowdown
All of these have contributed to gold’s appeal.
Thanks to the rising geopolitical tensions, investors are flocking to gold as a safe haven asset.
- US gold futures rose to $1,410.20 an ounce, up 0.7%.
- Spot gold rose to $1,406.83 an ounce, up 0.6% in a fifth straight session of gains.
- SPDR Gold Trust the world’s largest gold-backed exchange-traded fund, rose 4.57% on Friday from a day earlier, in its biggest one-day percentage gain since September 2008.
- According to the U.S. Commodity Futures Trading Commission, there was a bullish stance by hedge funds and money managers in COMEX, gold, switching to a net long in silver futures and options in the week.
So far for this month, gold prices remained above the $1400 level.
But that’s not all
The US dollar recently fell to a three-month low against a basket of currencies as investors speculate that the U.S. central bank will lower interest rates next month, all helping gold’s appeal.
Wham a thought is probably going through your head and you realize that it is a great opportunity to invest or trade Gold CFDs.
All that glitters is gold and you want some too!
You are right!
It’s pretty obvious once you think about it but the most important thing is to choose an online broker that offers the best opportunities to make successful and profitable trades like 24option.
But more about them later…
Let’s first hear what analysts and market specialists have to say.
Experts believe that there are rising expectations that the Fed will cut 50 basis point at their next regularly scheduled meeting in July, which supports gold.
Adding that no longer is the question of whether they will cut rates but by how much. Adding that puts the gold bulls back in control.
Additionally, analysts believe that the $1,400 level that gold is holding is psychologically important and a positive signal.
US and Iran tensions rise
Following reports of Iran’s Revolutionary Guard shooting down a US surveillance drone, tensions rose between the US and Iran even though Iran said that they were not looking for war.
US President Trump had sanctioned a retaliatory strike but called-off the strike at the last minute.
Instead, he said he would impose significant sanctions on Iran which are due to take effect on Monday.
To Iranian President Rouhani: NEVER, EVER THREATEN THE UNITED STATES AGAIN OR YOU WILL SUFFER CONSEQUENCES THE LIKES OF WHICH FEW THROUGHOUT HISTORY HAVE EVER SUFFERED BEFORE. WE ARE NO LONGER A COUNTRY THAT WILL STAND FOR YOUR DEMENTED WORDS OF VIOLENCE & DEATH. BE CAUTIOUS!
— Donald J. Trump (@realDonaldTrump) July 23, 2018
Here’s the deal:
Experts see that investor’s appetite for a safe haven asset was probably stirred up as a result of the US-Iran tensions.
Aiding the uptrend in the gold price also is the US-China trade war.
And picture this: Since 1 May, gold has gained around at 9%!
U.S. and China Trade
Markets are now focusing on the upcoming G20 meeting in Osaka, Japan and whether there will be any progress between the Trump administration and the Chinese counterparts on the trade war.
And this is the possibility…
Any continued drama between the two could help push gold higher!
US Federal Reserve
Investor’s bullishness in gold came after the US Federal Reserve and the European Central Bank stance that they were open to ease policies with rate cuts due to the global economic slowdown.
Bets are that this could happen as soon as next month. This has made the demand for gold likely to increase.
Here’s our analysis:
The US dollar’s weakness and the massive inflows into the ETF together with the heightened tensions between the US and Iran are supporting gold.
The $1,400 level that gold is holding is psychologically important and a positive signal.
As if that’s not enough
The gold rally has also helped to push the price of silver up!
The gray metal climbed 0.1% higher to $15.37 per ounce while platinum was up 0.9% at $813.82.
Additionally, there was also a rise in palladium gaining 1.1% to $1,516.03 an ounce.
Silver: The undervalued asset
There are signs for silver to perform. It is an undervalued asset and that for years it has been consolidating.
Now with the speculation that the Fed is more inclined to cut interest rates, this will entice traders’ interest in buying and investing in silver.
Some traders are more bullish on silver than gold!
Why is it so?
There are traders who believe that gold is rising because of uncertainty and this is due to the expectations of a Fed rate cut.
And if this happens, then silver will outperform gold.
In an interview with Bloomberg, Division Director at Macquarie Bank, Martin Lakos said that there is more speculative money shifting into bullion as a result of the recent weakness in the U.S. dollar.
He added that this suggests that these factors have more upside than downside for gold forecasting that by the first or second quarter of next year, the price of gold can reach as much as $1,450.
Now, get this…
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