Investors turned to safe-haven assets, as the week was plagued with political events. These geopolitical tensions support Gold third consecutive weekly gains. What other factors influenced Gold’s climb and will the bullish trend last?
ITRADER.com, 1 June – The precious metal came streaking for the third time this month as the gold futures for June delivery contract logged a 1.2% gain for the week ending May 26. On the said day, it tallied a 0.9% surge, adding $11 .70, to settle at $1 268.10 per ounce, its highest level since May 1. Meanwhile, spot gold held on to a 1.02% weekly gain and last traded at $1 268.21 per ounce.
Geopolitical tensions support Gold prices further
Historically, the economic uncertainties and geopolitical tensions support gold prices. Once again, Investors have turned to safe-haven precious metal as the week was plagued with series of political events including the Group of Seven meeting, the upcoming national elections in United Kingdom, and the ongoing investigation on President Donald Trump administration.
Throughout the week, the yellow metal remained steady, with only one losing session and four wins including a near one-month high.
Gold futures recorded a two-day winning streak as it surged on Wednesday and Thursday, climbing 0.24% and 0.33% respectively to jump from $1 254.94 to $1 255.10. US gold futures also crept up to $1 256.40 from $1 253.10.
Gold Dollar inverse relationship plays a role
On Tuesday, the commodity took a breather and finished at the negative zone after losing 0.48% to trade at $1 255.40 as investors locked in profits earned from two weeks of gain.
What about the gold dollar inverse relationship? When looking at the steady performance of the precious metal, we can see that it was also supported by a weaker dollar. Gold opened the week on a strong note as it registered a 0.51% rise to close at $1 261.48. Meanwhile the currency continued losing ground against its major rivals. This shows once again that the gold dollar inverse relationship plays a vital role.
Now the question resides, how long will the bullish trend prolong? Yesterday, AtoZForex.com’s market analyst forecasted that it’s pretty clear that the next expectation for Gold is a bearish correction. Find out more about the two scenarios of gold in the Elliott wave analysis of Sanmi Adeagbo.
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