The value of gold has reached 3-month highs in the previous trading session, with investors looking forward to the economic policy to be set by the Trump administration.
During the period, the precious metal, which has hit its highest since in November last year at $1,260.10 per ounce, was little changed at $1,256.93, while futures were steady at $1,258. At the same time, investors are waiting for Donald Trump’s policy speech to get clues about his plans to reduce taxes.
Commenting on the trend, analyst Jiang Shu said:
“The biggest driver of gold has been the relatively weak US dollar. People think that … Trump does not want a strong dollar and the market thinks that perhaps there would not be a rate hike in the first half of the year.
“The momentum has its own driving force. Since the beginning of the year, the gold price has always been on the rise. This will draw more and more momentum traders into the market.”
Money managers and hedge funds are also raising their net long position in bullion in COMEX gold to the highest by 14,482 to 82,464 lots in three months up to the third week of February. According to Shu, this as a sign that market sentiment is generally on the bullish side.
Holdings of the SPDR Gold Trust in New York—which was once the largest gold-backed exchange-traded fund in the world—have also increased more than 5% this February.
Now, the metal has resistance at the 200-day moving average of $1,362; support at $1,245; and crucial long-term resistance at $1,300.