Gold Price Outlook Boosted by Renewed Political Risk, Oil Tanker ’Attack’

Gold Price Chart and Analysis:

• Gold heading higher after reports of damage to two oil tankers, sparking political fears.
• Gold chart retains bullish momentum.

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Gold Price Nears Fresh 14-Month High

Gold prices have moved higher Thursday after reports that two Saudi Arabian oil tankers have been damaged in the Gulf of Oman. In what has been described – but not yet confirmed – as sabotage attacks, one tanker was reported being on fire while the other was damaged during the incident.

Crude Oil Prices Spike on Possible Oil Tanker Attack in the Gulf of Oman

The latest incident will do little to settle ongoing political tensions between Ian and the US. On Monday, Iran’s foreign minister Mohammad Javad Zariff said that the US had launched an economic war against his country and warned ominously that ‘Whoever starts a war with us will not be the one who finishes it’. On November 5, 2018 the United States fully re-imposed sanctions on Iran, targeting critical areas of Iran’s economy including energy and shipping.

US Department of the Treasury – Iran Sanctions

Gold retains its bullish outlook despite yesterday’s move higher in the US dollar, and is looking to set a new 14-month high, beating last Friday’s $1,348.25/oz. All three moving averages remain bullish while gold tested and then rejected the recent double-low at $1,320/oz. a level also defining the top of a gap on the June 3 bullish candle. The US dollar continues to find support from its 200-day moving average but a decisive break and close below may well start a new move lower, boosting the value of gold.

Gold Daily Price Chart (September 2018 – June 13, 2019)

IG Client Sentiment shows that retail traders are 59.8% net-long gold, a bearish contrarian indicator. Recent daily and weekly sentiment shifts however suggest a stronger bearish bias.

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What is your view on gold – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at nicholas.cawley@ig.com or via Twitter @nickcawley1.