With an impressive start to the year this new heightened geopolitical development could be the catalyst to break out gold to multi year highs. The U.S. strike that killed a key Iranian general could have a ripple effect on the signing of the trade agreement on the 15th as China and Iran have recently worked together on joint military operations along with Russia. Any set back in the trade agreement would severely impact the direction of U.S. equities and the expectations for interest rate decisions globally.
Price Analysis and Outlook
The daily gold chart shows that momentum indicator slow stochastics are rising steadily and reaching overbought territory giving longer term indication that we have pushed into a Bull Market. While ADX, which measures strength of the trend, has turned up over 40 showing that the driving force behind the recent upward move is very strong. The 2 key levels of support to watch are the November 1st high of $1525.2 and the December 30th high of $1519.1. This should act as a consolidation level while a likely upside target completing this trend would be an objective of $1572